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Making an exception for the largest individual shareholder of Tata Sons, Pallonji Mistry, the company has re-appointed him to the board and extended his term till the end of the year. Mistry's term ended on June 1.
As per the Tata group's retirement policy, directors relinquish their non-executive positions when they complete 75 years of age (lowered to 70 years in 2000). Pallonji Mistry turned 75 on June 1.
Construction baron Mistry holds a 18.40 per cent stake in Tata Sons, the holding company of the Rs 52,000 crore plus Tata group. Charitable Tata trusts own 65.89 per cent of the equity, Tata companies own 12.86 per cent, and directors and individuals own 2.85 per cent.
The subscribed and paid-up equity capital of Tata Sons was Rs 40.41 crore on March 31, 2004. Tata Sons has large equity investments in major group companies.
A Tata group spokesperson said, "When the board met in June, given the exceptional circumstances wherein the TCS IPO was being considered, it was felt that the largest shareholder should continue his involvement in the board of Tata Sons till the end of the year."
The other Tata non-executive directors, JK Setna and BG Deshmukh, retired from the board of Tata Sons when they turned 75. Setna retired in August 2003, while Deshmukh retired in March 2004.
The big question is who will replace Mistry after he steps down. There has been speculation that Shapoor Mistry, Mistry's eldest son, will replace his father on the board. In an interview to Business Standard in September 2002, Tata group Chairman Ratan Tata said, "We will deal with it when the time comes."
The Mistry family will hold a 1.22 per cent stake in TCS' post-offer equity base. But it also holds 18 per cent in Tata Sons, which holds 81 per cent in TCS. So indirectly, it has another 15 per cent stake in TCS.
Apart from Tata Sons, Mistry also holds about a 3 per cent stake in Tata Investment Corporation. In April, Mistry retired from the board of the investment company.
Ratan Tata is the chairman of Tata Sons. The other members of the board are NA Soonawala, FK Kavarana, Syamal Gupta, JJ Irani, R Gopalakrishnan, Ishaat Hussain, RK Krishna Kumar, AR Gandhi and Alan Rosling. The other Tata stalwarts who are scheduled to retire are Soonawala and Syamal Gupta.