MUMBAI (Reuters) - The board of Tata Global Beverages (TAGL.NS), which co-owns and runs Starbucks (SBUX.O) coffee stores across India, has replaced Cyrus Mistry as its chairman, the first Tata group company to depose him since his removal last month from the helm of parent holding company Tata Sons.
Mistry said in a statement the manner in which he was replaced as chairman of Global Beverages was "inaccurate and illegal," intensifying the high-profile power struggle at the Tata group.
In a boardroom coup last month Mistry was removed as chairman of Tata Sons, the holding company for the $100 billion steel-to-software Tata empire in which Mistry's family hold a minority stake. Patriarch Ratan Tata is now back in charge as a bitter public row ensues.
Despite being removed as chairman of Tata Sons, and now Tata Global Beverages, Mistry still remains chairman of some of the group's major companies like Tata Motors (TAMO.NS) and Tata Steel (TISC.NS), where Tata Sons does not have majority ownership.
Tata Sons has called shareholder meetings at these companies to get Mistry ousted from those boards.
The group last week dismissed Mistry as chair of Tata Consultancy Services (TCS.NS), where Tata Sons has a stake of over 70 percent.
In the case of Tata Global Beverages, seven out of 10 directors on the board voted for Mistry's ousting and appointed Tata veteran Harish Bhat in his place.
Mistry's office questioned the accuracy and legality of his removal in a statement saying "The Tatas continue to demonstrate the lack of respect for due process of law."
A Tata Sons spokesman said the process at Tata Global Beverages was completely legal.
Earlier on Tuesday Mistry sought to defend his record at Tata Sons, saying in a statement that allegations that he oversaw rising expenses and impairment provisions were "another brazen attempt to mislead the public and shareholders."
Mistry alleged that one reason for a rise in expenses under his tenure was because Tata Sons was bearing some costs on behalf of Ratan Tata, while impairments and writedowns were due to legacy issues.
He was responding to Tata Sons' statement last week, which criticized his performance and accused him of being responsible for rising expenses and impairment provisions and falling dividends.
"The challenges the group faced could not be wished away," Mistry's statement said, detailing the challenges that he had inherited as chairman.
Mistry also said in the statement that the group had paid the expenses of Ratan Tata, when he was chairman emeritus of Tata Sons and also chair of the Tata trusts, which amounted to about 300 million rupees ($4.4 million) in 2015 and included his use of corporate jets and office costs.
When Ratan Tata retired in 2012 the board of Tata Sons decided to support an office and facilities for him, a Tata Sons source said, adding that Mistry and the other directors had signed the document detailing this provision.
Mistry's statement also said the impairments at Tata Sons were due to legacy issues, largely relating to Tata Teleservices Ltd [TATASL.UL], and that Mistry had focused on building reserves and resources to handle the writedowns.
Reporting by Aditi Shah; Editing by Jane Merriman, Greg Mahlich