Tata Shares Fall As Shapoorji Pallonji Group Indicates Cyrus Mistry Will Not Give Up Without A Fight

One of India's biggest business houses, Tata Sons, seem to be heading towards a legal battle as Shapoorji Pallonji family, to which Mistry belongs has said that they will take a legal recourse to challange his sacking. Meanwhile, the fallout on between the top executives reflected on the shares of various Tata companies on Tuesday. Except for Tata Teleservices (Maharashtra) Ltd. which jumped by 6 per cent all the other stocks opened in loses, something that predictable given the confusion surrounding the entire thing.

BCCL

As the "unexpected move" doesn't seem to have gone down well, at least with the Shapoorji Pallonji family. The company has indicated that they will take legal action against the Tatas for his ouster less than five years after his appointment as the chairman of one of the biggest business houses in the country.

BCCL

While it is still unclear what exactly led to the surprise ouster, various reports claim that there was a growing friction between Mistry and Tata especially in the way he conducted business.

According to Economic Times, Mistry wasn't even consulted before the board took the decision on Monday.?

NDTV, quoting sources, who were present at the meeting reported that the removal was not even listed in the agenda of the meeting. ?When Mistry opposed the move citing Tata rule book, which says a 15-day notice has to be given before bringing such an item before the Board, he was told ?"we have legal opinion" in support of the decision.

Reuters

Citing this it is believed that Mistry will be moving to court at the earliest.

The board which replaced Mistry with his predecessor Ratan Tata has also appointed a six-member committee which includes Tata himself to search for a new face for the top job.

In a letter to the employees, Tata said the decision was "in the interest of the stability of and reassurance to the Tata Group."?

"The Board has requested me to perform the role of the Chairman and I have agreed to do so in the interest and reassurance of the Tata group," Ratan Tata said in the letter.

BCCL

"A new management structure is being put in place and a selection committee has been constituted to identify the next chairman of Tata sons," the letter read.

Even though he has been ousted as the chairman, 48-year-old Mystry will continue to remain as an independent director of the Tata Sons, a position which he had held before becoming the chairman in 2012.