Cyrus Mistry back in the waiting line as Supreme Court stays order allowing him to be reinstated as Tata Sons Chairman
- The National Company Law Appellate Tribunal (NCLAT) had decided that the removal of Cyrus Mistry as the Chairman of Tata Sons was illegal and that he should be reinstated.
- This is the latest twist in a three-year old corporate dispute, in one of India's largest and the most-iconic corporate house.
- The listed companies of Tata Group are together worth over $100 billion, which is currently led by Chairman N Chandrasekharan.
Last month, the NCLAT decided that the removal of Cyrus Mistry as the Chairman of Tata Sons was illegal and that he should be restored in that position again. However, Tata Sons had 4 weeks to appeal at the Supreme Court against the latest order from the NCLAT .
A two-member NCLAT bench headed by Chairperson Justice S J Mukhopadhaya pronounced its judgement, which brought a three-year old corporate dispute, in one of India's largest and the most-iconic corporate house, back to square one.
The listed companies of Tata Group are together worth over $100 billion, which is currently led by Chairman N Chandrasekharan.
These are some of the scathing remarks against Tata Sons, and in favour of Cyrus Mistry, from the NCLAT judgement:
1. The level and scale of interference on a wide range of topics which extended well beyond legacy hotspots.
2. 550 mails were exchanged between Ratan Tata and Cyrus Mistry demonstrating the level of interference.
3. Such interference fostered a pattern of decision-making that led to the board headed by Mistry being undermined.
4. No committee was formed for removal of the incumbent chairman as required under Article 118.
5. Self-serving and materially misleading arguments false to the knowledge were made on the absence of any need to form a committee to remove the Chairman.
6. No legal opinion was taken by the Board of Directors to determine whether the removal of the Executive Chairman in such a hasty manner was in accordance with the Articles.
Here’s a timeline of the legal battle between Cyrus Mistry and Tata Sons over the last three years.
Mistry, who was the sixth chairman of Tata Sons, was ousted from the position in October 2016. He had taken over as the chairman in 2012 after Ratan Tata announced his retirement. Mistry called today's order a victory for “good governance and minority shareholder rights.”
SEE ALSO: What Cyrus Mistry won today is the right to complaint— he still has to prove the charges against the Tata Sons Board
The Tata Sons has 4 weeks to appeal at the Supreme Court against the latest order from the NCLAT . The salt-to-software conglomerate, which also owns companies like the luxury car maker Jaguar Land Rover and the British tea brand Tetley is in no mood to give up.
The Tata Group seems to believe that the court gave Mistry more than what he asked for. “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 NCLAT order appears to even go beyond the specific reliefs sought by the Appellant,” the company’s spokesperson told Business Insider.
SEE ALSO: The full story of Cyrus Mistry's standoff with Ratan Tata, Mistry's dramatic ouster from Tata Sons in 2016 and the chaos that followed.
The Mistry camp had challenged the July 9 order of the Mumbai bench of the NCLT which dismissed the pleas against his removal as Tata Sons chairman, as also the allegations of rampant misconduct on part of Ratan Tata and the company's board.
A special bench of the tribunal had held that the board of directors at Tata Sons was "competent" to remove the executive chairperson of the company. The NCLT bench had also said that Mistry was ousted as chairman because the Tata Sons' Board and its majority shareholders had "lost confidence in him".
Two months after his removal, Mistry's family-run firms approached the NCLT as minority shareholders, against Tata Sons, Ratan Tata, and some other board members.
Mistry in his pleas primarily argued that his removal was not in accordance with the Companies Act and that there was rampant mismanagement of affairs across Tata Sons.
With inputs from PTI and IANS