Day after ousting Cyrus Mistry, Tatas file caveats against him and his firm

The Tata move comes a day after a Tata Sons board announcement said Mistry would be immediately replaced by Ratan Tata, for an interim period of four months.

Written by Maneesh Chhibber , Khushboo Narayan | New Delhi/mumbai | Updated: October 26, 2016 3:42 am
cyrus mistry, ratan tata, tata sons, tata, cyrus pallonji mistry, cyrus mistry sacked, Cyrus Mistry interview, Tata group, India business, Ratan Tata, tata and sons, cyrus mistry, tata, tata news, ratan tata interim chairman, business news, indian express news Ratan Tata in Mumbai on Tuesday. (Source:: Express photo by Ganesh Shirsekar)

Moving swiftly to ensure that no ex-parte order is passed in case ousted Tata Sons chairman Cyrus Mistry decides to move court, the Tata group Tuesday filed caveats against Mistry and his firm Cyrus Investment Pvt Ltd at various legal forums.

The caveats have been filed by Tata Sons, Ratan Tata and Sir Dorabji Tata Trust in the Bombay High Court and the National Company Law Tribunal, sources familiar with the development said. The Tata move comes a day after a Tata Sons board announcement said Mistry would be immediately replaced by Ratan Tata, for an interim period of four months.

However, the Cyrus Mistry camp said they have not moved the court against the decision of the Tata Sons board. “A caveat is a notice filed by a party fearing legal action seeking notice before action. Tatas have filed caveats seeking notice from Cyrus Mistry fearing legal action. Cyrus has not filed any caveat. He has already made a statement that such concerns are misplaced at this stage,” an official statement from Cyrus Mistry said.

While Tata Sons has appointed law firm Shardul Amarchand Mangaldas and Karanjawala & Co to advise them, Mistry has approached Desai & Diwanji for legal advice.

Meanwhile, Tata stocks came under selling pressure and fell by up to 3.16 per cent on the Bombay Stock Exchange Tuesday. The market capitalisation — or the market value of listed shares — of top listed Tata companies lost close to Rs 10,877 crore. Tata Steel fell 2.51 per cent, TCS 1.20 per cent and Indian Hotels 3.16 per cent. There are 29 publicly-listed Tata enterprises with a combined market capitalisation of about $116 billion (around Rs 775,000 crore) as on March 31, 2016.

Read Also: Ratan Tata asks top executives to focus on business, market leadership

The Pallonji Mistry group holds around 18 per cent stake in Tata Sons which makes them the largest individual shareholder. Tata Trusts and some of the Tata Group companies hold the remaining stake.

Meanwhile Tuesday, Ratan Tata, speaking to journalists in Mumbai, said his appointment was for a short-term and the process to succeed him would soon begin. “Assumed role of interim chairman for stability and continuity so that there is no vacuum,” Tata said.

Mistry, who was chosen by a five-member panel in 2011 to succeed Ratan Tata, took over the reins of the conglomerate when the industrialist retired on December 29, 2012, when he turned 75.

Mohan Parasaran, former Solicitor General who gave his legal opinion to Tata Sons before it replaced Mistry, said he stands by his opinion. “The opinion we gave was right from our perspective,” he said.

Parasaran also said that Ratan Tata and one other director of the company did try to persuade Mistry to step down from the chairmanship of Tata Sons before conducting the board meeting on October 24. “In a private meeting, he (Mistry) was put on notice… There is no compulsion (on the board) for giving any grounds for removal of a chairman… Mistry has been replaced and not removed. He continues to be a director of Tata Sons,” Parasaran said.

The Tatas also called top officials of group companies for a briefing on the developments.

Ratan Tata asked Tata companies to act as leaders in their respective markets and enhance returns to shareholders. Asking them to focus on their businesses without being concerned about the top-level change, Tata said his appointment was for a short term and the process to find a permanent to succeed him would soon begin.

“The companies must focus on their market position vis-à-vis competition, and not compare themselves to their own past. The drive must be on leadership rather than to follow,” he said, addressing managing directors and senior leaders of Tata companies.

“I look forward to working with you as we have worked together in the past. An institution must exceed the people who lead it. I am proud of all of you, and let us continue to build the group together,” Tata told a meeting called at Bombay House.

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    Satendra kumar
    Oct 26, 2016 at 6:52 am
    Sir Ratan Tata or someone else everyone come within country's law and order.Sir Ratan Tata a well respected businessman and a honoured man with dignity working with for the future of INDIA and Indians.
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      ah
      Oct 25, 2016 at 4:10 pm
      Mistry and all should follow Ratan Tata's instructions ..............
      Reply
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        stranger
        Oct 25, 2016 at 5:25 pm
        core competence of TATA group was about selling opium, and that hasn't decreased a bit. if you have a test of this great b be it in telecom(old tata tele) to cars you will appreciate. the reason you see so many TATA around because they colluded with govt and didn't allow fair market play. not only true for TATA but every big business houses of india.
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          Partha Trivedi
          Oct 26, 2016 at 3:43 am
          Something is truly rotten in Bombay House! If the need amongst corporates in India is good governance, then Ratan and his conniving cohorts have spectacularly failed the Tata Group and their many shareholders! A much better and more transparent strategy would have been to debate and discuss all the decisions taken by Cyrus Mistry quite openly, and then to have voted on those matters. If Cyrus lost then morally he would have to step down. Instead, Ratan slyly went surreptiously through the back door, conspired with other directors, many of whom want to retain their lucrative seats, and stealthily ejected Cyrus. Time will tell (or the courts may do this sooner) whether Ratan is trying to cover up moral (or worse, possibly even criminal) culpability for past hasty and misplaced decisions that were so disastrous for Tata Group! Once they got Cyrus out, Ratan is heaping planted leaks to discredit Cyrus! The fact remains that Ratan made very poorly thought out decisions in buying Corus Steel, and grossly overpaying for it! Was Ratan's soul bought by the Brits, who anyway didnt like Cyrus because he wanted to close Tata's steel plants in the UK? Don't forget Ratan is on some UK government advisory board that advises the UK government on business and industrial matters! lt;br/gt;lt;br/gt;In summary, the sly actions of Ratan Tata is not a glowing credit to the Indian Board Room! Instead, it is a grossly demeaning insult to Indian Corporate Governance, even if it falls within the precincts of company law (and I am not even sure of that!). Shame on you Ratan!
          Reply
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            Rahul Iyer
            Oct 25, 2016 at 7:05 pm
            I am sorry for my ignorance, as I am an American, despite my being of Asian Indian background. It says that there was no reason given for this change at the top. Is there a real reason for this change? Usually it is perhaps due to some kind of board politics, or a performance issue. I am curious as to what happened...really!!.
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              David
              Oct 26, 2016 at 5:00 am
              Ratan Tata is a mild British Agent. He takes Indian capital and invests in loss making European ventures. There by neither gaining market foothold or technology. Something is rotten in the House of Tata's.
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                David
                Oct 25, 2016 at 5:08 pm
                Tata's have too many eggs in too many baskets. They are jack of all trades and masters of none. Today blue chip companies specialize. No Tata product or service is known for distinction or stand out. Tata's have invested heavily in loss making European ventures and have not gained either in market foothold or technology.
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                  Ravi
                  Oct 25, 2016 at 4:00 pm
                  Rattan ji now ( he invested in many new startup)entrusted to kick start the old tata grp.
                  Reply
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