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)

Delhi HC grants statutory bail to Sharjeel Imam in UAPA, sedition case

New Delhi: The Delhi High Court on Wednesday granted statutory bail to Sharjeel Imam in an Unlawful Activities (Prevention) Act (UAPA) and sedition case related to his alleged inflammatory speeches...

BJP tried to topple ‘honest government’ in Himachal, says Priyanka Gandhi

Kullu/Mandi: Congress General Secretary Priyanka Gandhi on Tuesday said the BJP has tried to topple the “honest government in Himachal Pradesh elected by honest people by buying MLAs as part...

Pakistan grants India consular access to two alleged spies

Islamabad: Pakistan has granted India consular access to two Indian nationals who were arrested from Gilgit-Baltistan (GB) and charged with espionage in 2020. The meeting between Indian diplomats and the...

Dozens killed in fresh Israeli attacks on Rafah: Palestinian medics

Gaza: Palestinian medics have said dozens of people have died in fresh Israeli attacks on the southern Gaza city of Rafah on Tuesday, two days after 45 people were reportedly...

SC registry refuses to accept CM Kejriwal’s plea seeking 7-day extension of interim bail

New Delhi: The Supreme Court registry has refused to accept the application moved by Delhi Chief Minister Arvind Kejriwal seeking a seven-day extension of interim bail to undergo medical examinations,...

Sex videos case: SIT, FSL sleuths search fugitive JD(S) MP Prajwal Revanna’s residence

Bengaluru: The Forensic Science Laboratory (FSL) sleuths and the Special Investigation Team (SIT) probing the sex videos case, conducted an extensive search at the residence of prime accused, JD(S) MP...

Election Commission revises sixth phase turnout to 63.37 per cent

New Delhi: The Election Commission on Tuesday revised the voter turnout in the sixth phase of the Lok Sabha election, spanning 58 seats in 8 states/UTs, to 63.37 per cent,...

Cong, CPI(M), Trinamool looted Bengal in phases: PM Modi

Kolkata: Prime Minister Narendra Modi on Tuesday accused the Congress, CPI(M) and Trinamool Congress of looting West Bengal in phases. “First the Congress looted West Bengal. The CPI(M) did the...

2020 Delhi riots: Court rejects bail plea of Umar Khalid in ‘larger conspiracy’ case

New Delhi: A Delhi court on Tuesday denied bail to activist and former Jawaharlal Nehru University (JNU) student leader Umar Khalid, in the "larger conspiracy" case related to the 2020...

Sex scandal: SIT to decide on arrest of JD(S) MP Prajwal upon arrival, says K’taka HM

Bengaluru: Karnataka Home Minister, Dr G Parameshwara stated on Tuesday that the decision to arrest JD(S) MP and prime accused in the sex video case, Prajwal Revanna, at the airport...

CM Kejriwal seeks urgent hearing in SC on application seeking 7-day extension of interim bail

New Delhi: Delhi Chief Minister Arvind Kejriwal on Tuesday sought an urgent hearing on his application filed before the Supreme Court seeking a seven-day extension of interim bail to undergo...

Death toll rises to 20 after storms hit US

San Francisco: At least 20 people have been killed after storms hit the US states of Texas, Arkansas, Oklahoma and Kentucky over the Memorial Day weekend. In Texas, the storm...

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