New Delhi : The National Company Law Tribunal (NCLT), on Monday, dismissed former Tata Sons chairman Cyrus Mistry’s plea against the country’s largest conglomerate, in which Mistry had, among other things, alleged operational mismanagement and oppression of minority shareholders, reported CNBC-TV18.
The NCLT’s Mumbai bench, ruling in favour of the Tata Sons Board on a petition filed by Mistry challenging his dismissal as chairman of the Tata group, said on Monday that Mistry was ousted because the Board and its members “lost confidence in him”.
Mistry, ousted from his position in October 2016, was the sixth chairman of the conglomerate.
“The taste of victory is sweet,” Abhishek Singhvi, the counsel for the Tatas told CNBC TV18 after the NCLT dismissed all the allegations made by Mistry.
Somasekhar Sundaresan, the counsel for Mistry, told the news channel that they will appeal against the verdict.
A two-member NCLT special bench, comprising of BSV Prakash Kumar and V Nallasenapathy, also rejected a proposal by Mistry for proportional representation for his group on the Tata Sons Board.
The NCLT, a quasi-judicial body for corporate grievances, said Ratan Tata’s conduct was not prejudicial to the company. The bench did not find any merit in allegations of mismanagement in Tata group companies.
The NCLT reportedly went into the merits of each of Mistry’s allegation and rejected all of them, from Nano to AirAsia to C Sivasankaran.
On 4 July, the NCLT deferred to 9 July its judgment on the petition filed by Mistry challenging his ouster as chairman of the Tata group. The bench of Kumar and Nallasenapathy were expected to deliver an order in the case on 4 July, but adjourned it to 9 July as the judgment was not ready.
Mistry, in the petition filed under the Companies Act, claimed that his removal was due to a result of mismanagement by the board’s trustees and oppression of minority shareholders of the group.
He had taken over as the chairman of the group in 2012 after Ratan Tata announced his retirement.
The Tatas argued that the law clearly allows removal of a chairperson and director and that Mistry was removed by a majority of seven out of nine, as Mistry had not voted for his removal and another official had abstained.
Mistry was appointed at the behest of the Tata Trusts and his removal cannot be questioned by minority shareholders, the group’s counsel, Singhvi, had argued before the tribunal.
The second part of Mistry’s plea focused on the alleged mismanagement by the Tata Sons Board and Ratan Tata, which supposedly caused a revenue loss for the group.
The first allegation by Mistry was that his removal as chairman and subsequently as director of the Board Tata Sons was a result of oppression by promoters, who are in turn owned by the Tata Trusts, which owns over 68 percent in Tata Sons.
Bureau Report
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