Mumbai: The day after Tata Sons removed Cyrus P. Mistry as the group's chairman, the issue appeared headed to the courts for what may likely be a messy legal battle.
Mistry was said to be in consultation with senior lawyers, even as the Tata Group moved caveats in the Supreme Court, the Bombay High Court and the National Company Law Tribunal.
Abhishek Manu Singhvi, who will represent the Tatas in the courts on Wednesday, said the caveats were just "an early warning system" so that the matter is not heard ex-parte.
The Shapoorji Pallonji Group, Mistry's father's group which holds 18.4 percent shares in Tata Sons, said they were "studying the circumstances" of the removal.
In response to news on TV, Mistry's office said that he has not filed any caveats. "He has already made a statement that such concerns are misplaced at this stage," a statement said. An official spokesman for Shapoorji Pallonji Group said that "there is no basis to media speculation about litigation at this stage."
Singhvi, who left for Mumbai from Delhi in the evening, told Times Now later that practically the entire board of Tata Sons -- seven out of nine directors -- had "lost confidence in Mistry". He added that Ratan Tata was committed to the Tata brand and whatever he did was for the improvement of the group.
The day after Tata Sons, the holding company of the Tata Group of companies, re-instated Ratan Tata in the place of Mistry, the 78-year-old former Chairman held a meeting with the chiefs of group companies and urged them to "act as leaders in their respective markets and enhance returns to shareholders".
"The companies must focus on their market position vis-a-vis competition, and not compare themselves to their own past. The drive must be on leadership rather than to follow it," Tata Group's Chairman Emeritus said, speaking to the group companies' managing directors and senior corporate leaders.
He urged the top leadership of the group companies to focus on their respective businesses, "without being concerned about change in leadership".
Ratan Tata's pep talk to his senior leaders came even as the surprise move in Tata Sons left India Inc reeling with shock.
In his talk with CEOs of Tata Group companies, Ratan Tata also said that "an institution must exceed the people who lead it. I am proud of all of you and let us continue to build this group together."
Hinting at possible changes in the functioning of the companies, he referred to ongoing initiatives and said these will be evaluated and those required would continue to be undertaken.
"If there is any change, they will be discussed with you," he assured the top bosses of the group companies.
The Tata Sons board had also constituted a Selection Committee to choose a new chairman. The committee comprises Ratan Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Lord Kumar Bhattacharyya.
The committee, set up as per the criteria in the Articles of Association of Tata Sons, has been mandated to complete the selection process in four months.
Mistry had taken over from Ratan Tata four years ago at a time when some of the group's main companies were facing tough operating environments, and his major challenge was to turn around the group's international steel business and to consolidate the other businesses. The $100 billion group employs some 700,000 persons.
The 48-year-old Irish-Indian citizen is the youngest son of Pallonji Mistry, whose construction company Shapoorji Pallonji & Co is the largest shareholder of Tata Sons, with a stake of around 18.5 percent.
Scrips of Tata Group's subsidiaries closed in the red on Tuesday. Shares of various subsidiaries of the industrial conglomerate fell in a range of about one to four percent during the day's trade, even as some recovery was seen during the intra-day trade.
At the BSE, shares of major firms like Tata Motors and Tata Steel pared some of their initial losses, yet ended in the red.
(With agency inputs)