Tata Sons hurries to challenge NCLAT order that reinstates Cyrus Mistry as deadline looms large

• Tata Sons filed a suit in Supreme Court challenging an order which asks them to bring Mistry back as its chairman.
  
  
• Tata Sons sought an urgent hearing on January 6 after the SC’s winter break, says a TV report.
  
  
• Tatas and Mistry family have been locked in a legal battle for four years ever since the former removed Cyrus Mistry as its executive chairman.

Cyrus Mistry has a long path to clear before he takes over his mantle as the chairman of Tata Sons yet again. In spite of the company law tribunal saying that he is the rightful chairman, the old guard at Tata Sons is in no mood to relent. Today, they filed a lawsuit in Supreme Court challenging the judgment by National Company Law Appellate Tribunal (NCLAT).

Tata Sons sought an urgent hearing on January 6 after the SC’s winter break, says a report by CNBCTV 18.

This move comes weeks after NCLAT passed its judgment on the four year old dispute between Tata Sons and Mistry family, one of its largest shareholders. NCLAT ruled that Mistry’s removal as chairman from Tata Sons was illegal and has directed it to bring him back his position. However, the court had then left a window of four weeks for Tata Sons to appeal at the Supreme Court.

Mistry was removed as the chairman of Tata Sons four years after he held the position, succeeding its charismatic leader Ratan Tata. However, Mistry had brought in many changes into the system, which were not accepted readily by many board members, and was removed from his position in 2016. While Ratan Tata did take over as the interim chairman for a while, the former head of TCS, N Chandrasekharan was brought in as the chairman in early 2017.

The Mistry family which owns 18.4% stake in Tata Sons moved National Company Law Tribunal (NCLT) after Cyrus was removed as a director from all Tata companies. But, NCLT dismissed the case. They appealed again in NCLAT which had said that Mistry’s removal is illegal and gave four weeks time to reinstate him. But Tata Sons chose to challenge the order.


Here is a timeline of the 4-year-old dispute:

October 2016: Mistry removed as Executive Chairman after four years in the hot seat and Ratan Tata takes interim charge

Mistry alleges Tata trustees of interference, oppression, and mismanagement. Mistry also warns that the group could end up with $18 billion writedowns

December 2016: Mistry resigns from all Tata group companies. Mistry family files a case in NCLT accusing Tata Sons of “mismanagement and shareholder oppression’

January 2017: Tata Sons names N Chandrasekaran, the then CEO of TCS, as Tata Sons chairman

February 2017: Mistry removed as director of Tata Sons

April 2017: NCLT dismissed Mistry firms’ case against Tata Sons. Mistry firms move the appellate tribunal against NCLT order

August 2018: Tata Sons converts into a ‘private limited company’ blocking the sale of shares by the Mistry family, who appeal against the decision by NCLT.

December 2019: Mistry wins the case. NCLAT orders his reinstatement as Chairman and that Tata Sons should become a ‘public limited company’ again.


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