Fri, 28th October 2016

Anirudh Sethi Report


Archives of “board of directors” Tag

Cyrus Mistry not cut out for the job; did not display leadership expected of chairman: Tata Group insiders

Was Cyrus Mistry removed from the post of Tata group chairman because of his inability to display the leadership expected of him? If a report on ET Now is to be believed, then Cyrus Mistry was not “cut out for the job”. Sources in Tata Group have told the channel that Cyrus Mistry was sacked because he was unable to make the cut as a leader. “Mistry did not display the leadership expected from the Chairman of Tata Sons. He was decent and hardworking, but was not cut out for the job,” sources have told the channel.

It appears that Mistry was given the ‘opportunity’ to resign, but he chose not to. “There is no particular reason for the decision to remove Mistry, the accretion of things led to it. There is no gentle way of removing a Chairman, it had to be done,” sources said, adding that the Tata Sons Board felt that Mistry was not what the group needs as a leader. Now, Mistry is expected to resign from the post of Chairman of several group companies as well.

Tata hits back at Mistry

India’s Tata Sons has hit back at Cyrus Mistry, after its former chairman, who was sacked on Monday, launched a blistering attack on the record of his predecessor Ratan Tata in a leaked email.

The holding company of Tata Group put out a strongly-worded statement on Thursday accusing Mr Mistry of making “unsubstantiated claims and malicious allegations”. The most explosive of those was that five of the Tata Group’s biggest businesses faced asset writedowns worth $18bn.

Mr Mistry also accused Tata Sons directors of sacking him “without so much as a word of explanation” — an action he condemned for its “invalidity and illegality”.

It starts by expressing “regret” that a confidential communication had been made public:

It is a matter of deep regret that a communication marked confidential to Tata Sons board members has been made public in an unseemly and undignified manner. The correspondence makes unsubstantiated claims and malicious allegations, casting aspersions on the Tata group, the Tata Sons board and several Tata companies and some respected individuals. These will be responded to in an appropriate manner.

Tata group could see Rs 1,18,000 crore in writedowns: Cyrus Misry

Group companies in the salt-to-software Tata Sonsconglomerate faces potential writedowns to the tune of close to $18 billion (about Rs 1,18,000 crore) due to investments in unprofitable businesses, according to an internal letter that ousted Chairman Cyrus Mistry sent to the company’s board.

Mistry was shunted out of the company on Monday by the Tata Sons board for reasons not officially made public by the group, however, sources told Reuters that Mistry had lost favor with family patriarch Ratan Tata and the powerful trusts, which own two-thirds of the group.

 Mistry said in the letter that Indian Hotels Co, passenger-vehicle operations of Tata Motors Ltd, the loss-making European steel operations of Tata Steel, its telecom venture and the Mundra ultra mega power plant of Tata Power are “legacy hotspots” of the company.

“A realistic assessment of the fair value (of) these businesses could potentially result in a write down over time of about Rs118,000 crores ($18 billion),” said Mistry in an e-mail seen by Reuters.

A spokesman for Tata Sons declined to comment. A spokeswoman for Cyrus Mistry declined to comment.

Cyrus Mistry says he was reduced to a “lame-duck” chairman: Full text of his letter to the Tata Sons Board

In a sharp letter, Cyrus Mistry, the ousted chairman of Tata Group, has blamed the directors of the conglomerate of not giving him a chance to defend himself and wrongly dismissing him. Mistry has also warned that the group may face $18 billion in write downs. Mistry has blamed five unprofitable businesses that he inherited, for the possible write downs. “I was shocked beyond words at the happenings at the board meeting of October 24, 2016. Apart from the invalidity and illegality of the business that was conducted, I have to say that the Board of Directors has not covered itself with glory. To “replace” your Chairman without so much as a word of explanation and without affording him an opportunity of defending himself in a summary manner must be unique in the annals of corporate history. The suddenness of the action, and the lack of explanation has led to all manner of speculation and has done my reputation and the reputation of the Tata Group immeasurable harm,” Mistry writes.

Mistry has said that as the group chairman, he tried to turn things around – be it from a Nano to an ultra-mega-power plant. Mistry has hit out at Ratan Tata, his predecessor, for interference. In an e-mail letter Mistry has lamented that Ratan Tata’s interference had increased to the extent that he (Mistry) was reduced to being a ‘lame-duck’ chairman.

Cyrus Mistry’s office denies filing caveats against Ratan Tata, Tata Group and Tata Trusts

Soon after a PTI report claimed that Cyrus Mistry has filed caveats against Ratan Tata, the Tata Group and Tata Trusts in NCLT, Cyrus Mistry’s office has denied any such move. According to various news channels, Cyrus Mistry’s office has clarified that no caveats have been filed, as yet. Earlier, it had also been reported that Tatas on their part have filed a caveat in the Supreme Court, High Court and NCLT to prevent Cyrus Mistry from getting ex-parte order against his sacking.

Cyrus Mistry had in December 2012 become the sixth chairman of the Tata Group, replacing Ratan Tata. Mistry had been the director of the company since 2006. Mistry was earlier managing director of the Shapoorji Pallonji Group. The unceremonious dismissal of Mistry — attributed to his performance — had the backing of the Tata Trusts, which hold a commanding 66% stake in Tata Sons. He, however, remains a director on the board.

Mystery surrounds the sudden decision by Tata Sons Board, but the analysts consensus is that Mistry’s sacking relates to performance-based issues. Meanwhile, Ratan Tata met Tata Group CEOs earlier in the day and told them to not read too much into the speculations. He said that the group would continue to focus on its core values and strengths. Pepsico’s Indra Nooyi and Tata International MD Noel Tata have emerged as contenders for the post of Tata Group Chairman, reported CNBC-TV 18. Tata Sons Board has constituted a Selection Committee to choose a new Chairman. The Committee comprises Ratan N. Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Lord Kumar Bhattacharyya, as per the criteria in the Articles of Association of Tata Sons. The committee has been mandated to complete the selection process in four months.

Jackson Hole Conference Schedule And List Of Attendees Released

The Kansas City Fed has released the schedule of its two day Jackson Hole symposium which, officially kicked off with dinner on Thursday night, hosted by dissident regional Fed president, and dissenter, Esther George (she voted against Yellen’s decision to keep rates unchanged in March, April and July). The highlight is tomorrow’s 10am ET Janet Yellen speech titled “The Federal Reserve’s Monetary Policy Toolkit.”

The speech is important because no matter what Yellen says, the market is virtually assured to surge as Citadel’s momentum ignition algos are greenlighted by the NY Fed trading desk.

Note the symbolic bear in the glass cage on the photo below.

Key highlights: Chair Yellen to give speech Friday morning; panel discussion Saturday with Bank of Japan Governor Haruhiko Kuroda, European Central Bank Executive Board Member Benoit Coeure and Bank of Mexico Governor Agustin Carstens

Outline of the program (all times Eastern): 


8 p.m. – Opening Reception and Dinner


  • 10 a.m. – Fed Chair Janet Yellen delivers opening remarks on “The Federal Reserve’s Monetary Policy Toolkit”
  • 10:30 a.m. – Adapting to Change in Financial Market Landscape: authors Darrell Duffie and Arvind Krishnamurthy (Stanford), discussant Minouche Shafik, deputy governor at Bank of England
  • 11:55 a.m. – Negative Nominal Interest Rates: author Marvin Goodfriend (Carnegie Mellon), discussant Marianne Nessen, head of monetary policy at Sweden’s Riksbank
  • 12:55 p.m. – Evaluating Alternative Monetary Frameworks: author Ulrich Bindseil, director of general market operations at European Central Bank, discussant Jean- Pierre Danthine (Paris School of Economics) and Simon Potter, executive vice president at Federal Reserve Bank of New York
  • 3 p.m. – Luncheon address by Christopher Sims (Princeton)
  • 4 p.m. – Conference adjourns for the day

BREAKING : Libya’s rival oil company leaders reach deal to unify sector

Once-rival leaders of Libya’s National Oil Corporation (NOC) have agreed on a structure for the group that aims to put to rest squabbles over who has the right to export the country’s oil, according to a statement.

Oil industry leaders in OPEC-member Libya have said they could quickly double production to over 700,000 bpd if conditions stabilized. Before a 2011 revolution, Libya was producing 1.6 million bpd.

The rival oil officials agreed in principle to unify the oil sector in May, but the agreement on the structure and leadership of a joint group took weeks of meetings to iron out. (here)

Mustafa Sanalla, who led the Tripoli-based NOC, will remain chairman of the group, while the head of the eastern-backed NOC, Naji al-Maghrabi, will serve as a board member, according to a statement seen by Reuters.

A UN-backed unity government that arrived in Tripoli in March is seeking to replace two rival governments that were set up in Tripoli and the east, and to unite Libya’s many political and armed factions.

BREAKING -Microsoft to buy LinkedIn in $26.2bn deal

Microsoft, the US software giant, is acquiring LinkedIn for $26.2bn in cash.

The offer of $196 a share represents a 50 per cent premium to LinkedIn’s closing price on Friday and is inclusive of the networking website’s net cash.

In a statement, the two companies said:

LinkedIn will retain its distinct brand, culture and independence. Jeff Weiner will remain CEO of LinkedIn, reporting to Satya Nadella, CEO of Microsoft. Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Weiner both fully support this transaction. The transaction is expected to close this calendar year.

CEO Of Asia’s Largest Commodity Trader Unexpectedly Resigns

We have tracked the problems of recently junked Noble Group – Asia’s largest commodity trader – extensively over the past year (see “Noble Group’s Kurtosis Awakening Moment For The Commodity Markets”, “Junk Isn’t Very Noble: Asia’s Largest Commodity Trader Responds To Moody’s Downgrade”, “Noble Group’s Cliffhanger”, “Noble Group’s “Collateral Margin Call”, “Noble Group’s “Margin Call” Part II: The Enron Moment”).

And then moments ago things finally turned serious for the company, which just a few weeks ago finalized a $3 billion credit facility in what according to some was an “all clear” moment. Apparently the only clarity was for long-time company CEO, and former Goldmanite Yusuf Alireza, that the time has come to exit stage left.

As the company announced moments ago on the Singapore stock exchange, not only is CEO Alireza resigning, to be replaced by William Randall and Jeff Frase as co-CEOs, but the company will also begin the sale process of its Noble Americas Energy Solutions, a deal that will generate “significant cash proceeds”, which is great since Nobel is desperately in need of cash; it also means that the company is losing one more of its star performing assets as it continues to asset strip itself of any potential future growth, and is merely scrambling to preserve solvency and liquidity.

Former CAG Vinod Rai expresses concern over economic growth

Chairman of Banks Board Bureau and former Comptroller and Auditor General of India Vinod Rai today expressed concern that the country’s economy has slipped to six per cent after excellent signs of growth.

“The Indian economy was displaying excellent signs of growth, buoyancy and remarkable resilience but from attempting to reach double digit growth in our GDP, we are sliding back to six per cent,” he said speaking at the 18th convocation of Indian Institute of Management-Kozhikode (IIM-K).

He also said it was not enough to be a country having the fourth largest number of billionaires in the world and yet hardly have any globally accepted patents to showcase industrial or manufacturing muscle.

“Ethical management and leadership is the cornerstone for any successful business enterprise. It should be the mantra as you begin your careers”, Rai told the passing out students.

He stressed on the need for students to be change agents to build a robust economy with a good framework for corporate governance and excellence.

As many as 358 students were awarded the Post Graduate Diploma in Management.