A day after resigning from the boards of listed Tata group of companies, Cyrus Mistry on Tuesday filed a suit in the National Company Law Tribunal (NCLT) against Tata Sons for “oppression and mismanagement” in the Tata group holding company.
Mistry’s family-owned investment firms moved the Tribunal under Section 241 and 242 of the Companies Act. The first hearing by NCLT on the petition is slated for December 22, said sources close to the Mistry camp.
Tata Sons said in a statement, “this afternoon, Tata Sons Limited was served with a petition under Sections 241 and 242 of the Companies Act before the National Company Law Tribunal. We understand that the petition has been filed by investment companies of Cyrus Mistry. Tata Sons is in consultation with its lawyers and will contest the allegations therein.”
“Tata Sons reiterates that it has followed the highest standards of corporate governance in its operations and views the petition as an unfortunate outcome of the situation arising from Mistry’s complete disregard of the ethos of the Tata group and Jamsetji Tata. Despite, Mistry’s recent assertions that it is not a personal issue, it is evident that it always has been for him a personal issue which reflects his deep animosity towards Ratan N Tata,” Tata Sons said
According to Tata Sons, Mistry was the chairman of Tata Sons for almost four years and it is surprising that he is now making allegations on activities of Tata Sons after doing little to address them, in his tenure both as a Director (since 2006) and as chairman since 2012. “Mistry’s removal as chairman from the board of Tata Sons was approved by an overwhelming majority of the directors and it is unfortunate that Mistry has not been able to graciously accept the decision of the very same board that appointed him,” it said. Mistry had indicated about taking the legal route on Monday. “Having deeply reflected on where we are in this movement for cleaning up governance and regaining lost ethical ground, I think it is time to shift gears, up the momentum, and be more incisive in securing the best interests of the Tata Group,” Mistry had said.
Mistry had said, “It’s with this thought in mind that I have decided to shift this campaign to a larger platform and also one where the rule of law and equity is upheld.” On October 24, the board of Tata Sons had removed Mistry as the Chairman of Tata Sons. Ratan Tata, who Mistry had replaced on December 29, 2012, was appointed as interim Chairman for four months during which a search committee will look for a replacement.
Both the sides were engaged in a ding-dong battle making accusations and allegations against each other since Mistry’s removal from the Tata Sons board. Mistry was removed as chairman of several companies including TCS, Tata Steel, Tata Teleservices and Tata Industries. Tata Sons, the promoter of Tata group companies, had asked various group companies to convene extraordinary general meetings (EGMs) to remove Mistry as director from group companies as Mistry had refused to resign from them after his ouster from Tata Sons.
Mistry will continue on the board of Tata Sons, the principal promoter of Tata companies. The Mistry family holds over 18 per cent stake in Tata Sons while the Tata Trusts, headed by Ratan Tata, controls 66 per cent stake. Sources close to Mistry said, “first failure of governance is the failure of Mr Tata to follow the articles, formation of a committee to remove the chairman. He hasn’t ceased to be a Tata employee.”
Shareholders raise concern at Indian Hotels EGM
Mumbai: Indian Hotels Company Ltd (IHCL) shareholders expressed concern over Cyrus Mistry taking the battle to the courts at the extraordinary general meeting on Tuesday. With Mistry quitting Indian Hotels board on Monday, there was no voting on removing him as director but shareholders showed concern over the ousted Tata Sons chairman’s intention of taking legal course. As many as 35 shareholders expressed their views to interim chairman Ratan Tata along with Tata Trusts trustee R K Krishna Kumar and Sir Dorabji Tata Trust managing trustee R Venkataramanan. IHCL MD and CEO Rakesh Sarna chaired the meeting, in which directors, including Deepak Parekh, Mehernosh Kapadia and Nadir B Godrej, were also present. ENS