Opposing the National Company Law Appellate Tribunal’s order to reinstate ousted Chairman Cyrus Mistry as its chairman, Tata Sons on Wednesday said it will take appropriate legal recourse against the verdict. The holding company of the Tata group firms further said that it was not clear how the order sought to over-rule decisions taken by its shareholders and those of listed group firms at ‘validly constituted shareholder meetings’.
While reacting to the tribunal’s order, Tata Sons said the “order appears to even go beyond the specific reliefs sought by the appellant (Mistry)”.
“It is not clear as to how the NCLAT order seeks to over-rule the decisions taken by shareholders of Tata Sons and listed Tata operating companies at validly constituted shareholder meetings,” the company said.
Tata Sons strongly believes in the strength of its case and will take appropriate legal recourse, it said in a statement.
The company also assured its “various stakeholders that it not only has always operated in a fair and equitable manner but also acted in accordance with the law and will continue to do so”.
The statement came after Cyrus Mistry said the NCLAT’s verdict isn’t a personal victory for him and rather a vindication of his stand. He said the tribunal’s decision is a victory for the principles of good governance and minority shareholder rights.
In a major development in the Tata Sons-Cyrus Mistry case, the NCLAT on Wednesday restored Mistry as executive chairman of Tata Sons and ruled that appointment of N Chandrasekaran as head of the holding company of over USD 110 billion salt-to-software conglomerates was illegal.
The NCLAT also held that the group’s chairman emeritus Ratan Tata’s actions against Mistry were oppressive. It, however, stayed the operation of the order with respect to reinstatement for four weeks to allow Tatas to appeal.
Setting aside a lower court order, the NCLAT also quashed the conversion of Tata Sons into a private company from a public firm. It also directed Tata Sons not to take any action against Mistry, whose family owns some 18 per cent interest in Tata Sons.
The remaining 81 per cent is held by Tata Trusts and Tata Group companies along with Tata family members.
Mistry, scion of the wealthy Shapoorji Pallonji family, had in December 2012 succeeded Ratan Tata as the Executive Chairman of Tata Sons, a post that also made him the head of all Tata group listed firms such as Tata Power and Tata Motors. In an overnight coup, he was removed as the Chairman of Tata Sons in October 2016. Along with him, the entire senior management too was purged and Ratan Tata was back at the helms of affairs four years after he took retirement.
Mistry challenged the removal before the Mumbai bench of National Company Law Tribunal but lost and then went in for appeal at the NCLAT.
Tatas had cited the alleged failure of Mistry to “deliver on the promises that he had made at the time of his selection as the Chairman” and inability to lead the group in a cohesive manner and failure in providing proper guidance and support to the group as the reasons for his sacking.
Mistry had contended that he was removed because of his “efforts to remedy past acts of mismanagement”, for resisting interference of Ratan Tata and for instituting a formal governance framework to regulate the role of the Tata Trusts. The “legacy hotspots” included shutting down the small car Nano project; cutting losses with expensive decisions in firms such as Indian Hotels Company Ltd (IHCL) and Tata Teleservices Ltd; and Air Asia fraud.
-With PTI inputs
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