Independent directors of Indian Hotels back Mistry’s leadership
BOOSTER DOSE Praise steps taken by Cyrus to provide direction, leadership to hospitality firm
MUMBAI: Tata Group company Indian Hotels, which continues to be led by ousted chairman Cyrus Mistry, on Friday added a new chapter to the boardroom battle at Bombay House, with independent directors of the hospitality arm giving strong endorsement of Mistry’s leadership.
In a statement to the Bombay Stock Exchange on Friday, the independent directors, who are external candidates and do not represent the Tatas, vouched for the steps taken by Mistry in “providing strategic direction and leadership to the company.”
“Taking into account board assessments and performance evaluations carried out over the years, the independent directors unanimously expressed their full confidence in chairman, Mr Cyrus Mistry, and praised the steps taken by him in providing strategic direction and leadership to the company,” the directors, who met ahead of IHCL’s board meeting, said in the statement.
The 10-member board of Indian Hotels include six independent directors — HDFC chairman Deepak Parekh, former Mckinsey partner Ireena Vittal, former Hindustan Unilever chairman Keki Dadiseth, industrialist Nadir Godrej and corporate leaders Vibhu Paul Rashi and Gautam Banerjee. The four others on the board are Mistry, his older brother Shapoor and two Tata executives.
Besides Indian Hotels, Mistry is the chairman of a number of Tata Group companies, including Tata Steel, Tata Motors, Tata Consultancy Services (TCS), Tata Power and Tata Global Beverages, among others. Sources close to Mistry have said that he has no intention of stepping down from his post at these companies.
Indian Hotels, which owns marquee Tata properties, including the Taj group of hotels, on Fri- day reported a net profit of ₹28 crore during the July-September quarter, compared to a net loss of ₹7 crore in the same period last fiscal, on the back of a rise in revenue and the receipt of one-time claims from a state government.
Shares of Indian Hotels ended up 2.75% on the BSE on Friday.
“After deliberations, the independent directors came to a view that being a listed company it was imperative for the independent directors to state their views to investors and public at large such that those that trade in the securities of the company make an informed decision,” the statement from the directors added.
Indian Hotels, which has a net debt of ₹3,170 crore as of September 30, 2016, has been taking steps to prune non-core assets; it sold off its interests in IHMS (Boston) LLC, which owned the Taj Boston, in July this year.
In a letter to the directors of Tata Sons last week, Mistry had said that Tata Group companies had made several bad acquisitions, which could result in a potential $18-billion writedown. He had also said that Indian Hotels had acquired the SeaRock hotel in Mumbai at a highly inflated price, and had sold many of its foreign properties at a loss.