CLT upholds Tata Sons 2016 move sacking Cyrus Mistry as Chairman

July 9, 2018
Mumbai:In a significant ruling, the National Company Law Tribunal (NCLT) on Monday upheld the October 24, 2016 decision of the Tata Sons Board of Directors dismissing its then Chairman Cyrus Mistry, a company official said here, which Mistry’s office termed as “disappointing” while Tata Sons welcomed the decision.

“The judgement has only re-affirmed and vindicated that Tata Sons and its operating companies have always acted in a fair manner and in the best interest of its stakeholders. The Tata Group has always been committed and will continue to be committed to transparency and good corporate governance of global standards,” said Tata Sons Chairman N. Chandrasekaran.

“Tata Sons hopes that a finality will be given to the judgement of NCLT, Mumbai by all concerned in the larger interest of companies, the shareholders and the public,” Chandrasekaran added.

The NCLT ruled that the Tata Sons board of directors was competent to remove the executive Chairman and that Mistry was ejected as the board members had lost confidence in him.

Rejecting Mistry’s plea to reinstate him on the Board of Tata Sons, the NCLT pointed out that he (Mistry) had openly gone against the Board, and hence against the company.

“The ruling of the National Company Law Tribunal is disappointing although not surprising. We will continue to strive for ensuring good governance and protection of interests of minority shareholders and all stakeholders in Tata Sons from the wilful brute rule of the majority,” office of Cyrus Mistry said in a statement.

The much-awaited verdict of NCLT Mumbai by a Special Bench comprising B. S. V. Prakash Kumar and V. Nallasenapathy came in a petition filed by Mistry after he was abruptly ousted as the Tata Sons Chairman that day (2016), creating an upheaval in the Indian corporate world.

Mistry later quit from the board of six other Tata Group companies but challenged the Group and his successor, the former Interim Chairman Ratan Tata’s decisions, before the NCLT.

The petitioners, Cyrus Investments Pvt. Ltd and Sterling Investments Group of the Shapoorji Pallonji Group had filed the plea against the Tata Sons directors and trustees of Tata Trusts, alleging among other things, abuse of articles of association by outsiders, breakdown of governance and loss of ethical values.

“The ruling is in line with the earlier position expressed by the Tribunal. An appeal on merits will be pursued. Matters like TTSL, Air Asia, recovery of dues from Siva, non-closure of a loss-making Nano, a struggling resolution of Tata Steel Europe, all present serious issues that will be pursued. Not only the facts that were under consideration but also subsequent facts and developments that continue to evidence oppression and mismanagement will be under scrutiny and will be pursued in full earnest,” the official statement from Mistry’s office said.

“Ours has always been a principled fight to restore the Tata Group to its glorious days of high standards, best practices and most importantly, the best value systems. In this journey, no matter how hard it may seem, as shareholders who have always supported the Tata Group, it remains our duty to protect the Tata Group from those were destroying value and making the Group vulnerable to external forces,” it added.

Official sources indicated on Monday that Mistry is likely to challenge the NCLT verdict before the National Company Law Appellate Tribunal, New Delhi.

They further contended that Mistry was sacked as Chairman and later as Tata Sons director as a result of “oppression by promoters who are in turn owned by Tata Trusts that owns over 68 per cent in Tata Sons”.

The petition also listed how the Articles of Association were violated and misused “to give powers to the majority shareholders to subvert the interests of the minority shareholders and interests of the company.”

Alleging massive revenue losses for the Group owing to the alleged mismanagement by Tata Sons board and Ratan Tata, the petition pointed to Ratan Tata’s relationship with C. Sivasankaran and his companies, provided them aex-gratia favours’ without there being any aquid pro quo’ for the Tata shareholders or their group companies, and sought a forensic audit into such dealings.

Similar allegations were on the transactions with Mehli Mistry and Tata Power, resulting in an unjust enrichment of some entities and sought a forensic audit into these financial deals, and referring the findings to the Ministriy of Company Affairs’ Serious Fraud Investigation Office (SFIO).

Accusing Tata Trusts trustees, Ratan Tata and Lord Kumar Bhattacharya of regularly reviewing the operations of various Tata Group companies though not being directors in any, the petition claimed violation of Insider Trading Rules by giving them access to price sensitive information.

A similar demand was made for forensic audit into the alleged fraudulent transactions of Rs.22 crore between Deloitte Haskins & Co, with Air Asia India with non-existent parties in India and Singapore.

Contending another example of oppression by Mistry, the petition claimed that during the course of the NCLT hearing, the Tata Sons board sought to convert it into a private company.

However, the NCLT dismissed all the allegations and rejected Mistry’s plea to reinstate him on the Tata Sons Board.

Arguing for the Tata Group, its counsel Abhishek Manu Singhvi told the NCLT that Mistry was appointed at the behest of Tata Trusts and his removal cannot be questioned by minority shareholders and he was removed as per provisions of the law by seven out of nine directors in which Mistry did not vote for his removal and one director abstained.

Singhvi argued that Mistry was removed because the Tata Sons Board had lost confidence in him, as he had intentionally and in bad faith, “leaked sensitive and confidential information” which eroded Tata Group’s market value.(IANS)

Aaftab confesses to killing Shraddha during polygraph test

New Delhi: Aaftab Amin Poonawalla confessed to killing his live-in partner Shraddha Walkar and disposing off her body parts during his polygraph test conducted at the Forensic Science Laboratory (FSL) in...

Communal rift highest in India during height of Covid pandemic: US think-tank

Islamophobic hashtags like #CoronaJihad circulated widely on social media, seeking to blame Muslims for the virus India recorded the highest rate of social tensions along religious lines in the 2020...

India records progress in maternal deaths, lowest in Kerala, highest in MP & UP; 8 states meet SDGs

The country’s MMR declined to 97 during the period 2018-2020 from 113 during 2016- 18 and 130 during 2014-16 Assam recorded an MMR of 195 in 2018-20. Madhya Pradesh was...

Wanted UP SP MLA booked for travelling on forged Aadhaar

Kanpur (Uttar Pradesh) : The absconding Samajwadi Party MLA Irfan Solanki has been booked for boarding a New Delhi to Mumbai flight on a forged Aadhaar card on November 11....

6 killed, 15 injured in bus-truck collision in UP district

Bahraich (UP) : At least six people were killed and 15 others injured when a bus collided with a truck in Tappe Sipah area of Bahraich district on Wednesday. The...

New NDTV board approves Prannoy Roy & Radhika Roy’s resignation as RRPR directors

New Delhi : In a dramatic late night development on Tuesday, the new NDTV board approved the resignations of Prannoy Roy and Radhika Roy as directors of RRPR Holding Private...

Singer Daler Mehndi’s farmhouse among three sealed in Gurugram

Gurugram, Nov 30 (IANS) The Department of Town and Country Planning (DTCP) sealed three farmhouses, including one belonging to noted Punjabi singer Daler Mehndi near Damdama Lake in Sohna, an...

Tata Group to consolidate Air India and Vistara

New Delhi"  The Tata Group on Tuesday announced the consolidation of its airlines, Vistara and Air India. With this consolidation, Air India will be India's leading domestic and international carrier...

Another blow to Vijayan govt as Kerala HC upholds Dr Ciza Thomas as interim VC of KTU

Thiruvananthapuram: Handing another blow to the Pinarayi Vijayan government, Kerala High Court on Tuesday upheld the appointment of Dr Ciza Thomas as the in-charge Vice Chancellor of APJ Abdul Kalam...

Delhi-based lawyer files complaint against Israeli filmmaker for calling ‘The Kashmir Files’ vulgar

New Delhi: A Delhi-based advocate Vineet Jindal has lodged a complaint against Israeli Director Nadav Lapid for making remarks like "a propaganda" and "vulgar" for the movie "The Kashmir Files", which...

Israel’s Ambassador leads condemnation of IFFI jury chief’s comment

New Delhi: The unwarranted criticism of 'The Kashmir Files' by the jury chief of the International Film Festival of India (IFFI), Israeli screenwriter and director Nadav Lapid, has drawn strong reactions...

Sri Lankan Navy detains 23 Indian fishermen

Chennai: The Sri Lankan Navy has reportedly detained 23 Indian fishermen from Pudukottai, Tamil Nadu. Coastal marine police sources told IANS that fishermen from Kottaipattinam and Jagadhipattanam in the Pudkottai district...

Read Previous

‘The English Patient’ wins public poll of Man Booker

Read Next

SC upholds death penalty for Nirbhaya gang rape convicts

Leave a Reply

Your email address will not be published.

WP2Social Auto Publish Powered By : XYZScripts.com