Ousted Tata Sons chairman Cyrus Mistry on Monday scored what is being seen as a significant moral victory when he received the backing of the independent directors of yet another major Tata Group company, Tata Motors.
Tata Motors said today its consolidated revenues for the second quarter rose 6.94 percent year-on-year to Rs 67,999.7 crore, EBIT (earnings before interest and tax) stood at Rs 6,282 crore while the company swung to a profit of Rs 848 crore, compared to a Rs 1,740 crore loss last year.
Revenue was slightly ahead of analysts’ estimate of Rs 65,919 crore but EBIT and profit fell short of a poll seeing Rs 8,559 crore and 2,768 crore, respectively. The company said its British subsidiary JLR did well, along with, in its local business, its car and local commercial vehicle units but profit figures were hampered by hedging losses of Rs 3,510 crore and adverse commodity derivatives impact of Rs 187 crore. The Indian standalone business, however, again suffered a loss.
After a board meeting that lasted nearly five hours, the Tata Motors company secretary , H K Sethna, issued the stock exchanges a statement saying, “The independent dire ctors have confirmed that all decisions taken by the board with regard to the strategy , operations and business of the company have been unanimous and executed by the chairman and the management accordingly .”
People close to the new dispensation at Bombay House argued that the Tata Motors statement was more “guarded and veiled” in that it did not mention Mistry by name, instead referring to him as “chairman”.
But the Mistry camp was quick to co unter, saying that the Tata Chemicals letter of November 10 hadn’t named Mistry either, and that “chairman means Mistry”. It pointed out that the wording of all the three statements issued by IHCL, Tata Chemicals and Tata Motors were very similar in expressing their “confidence” in the respective managements, except that the one on behalf of the independent directors of the hotels company had gone a step further and “praised” Mistry by name.
The Tata Motors communique says, “The independent directors have further affirmed that the company continued to be governed, supervised and managed under the guidance and direction of the board. The management of the company and its subsidiaries have the full confidence and support of the independent directors.”