New Delhi,jul 11:
Tata Sons Monday said the NCLT order dismissing pleas of Cyrus Mistry vindicates that the group and its operating firms have always acted in a fair manner even as Mistry said he would challenge the ruling.In a legal battle running for nearly two years, the National Company Law Tribunal (NCLT), Mumbai on Monday dismissed the pleas of Mistry challenging his removal as Tata Sons Chairman in October 2016. Welcoming the order, Tata Sons Chairman N Chandrasekaran hoped “that a finality will be given to the judgement of NCLT, by all concerned in the larger interest of companies, the shareholders and the public”.”The judgement has only reaffirmed and vindicated that Tata Sons and its operating companies have always acted in a fair manner and in the best interest of its stakeholders,” he said in a statement.
The Tata Group has always been committed and will continue to be committed to transparency and good corporate governance of global standards, he added. On the other hand, a statement from Mistry’s office described the ruling as “disappointing although not surprising”.
The ruling is in line with the earlier position expressed by the tribunal. An appeal on merits will be pursued, it said. “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,” the statement added.In an oral order, a Mumbai division bench of NCLT, presided over by B.S.V. Prakash Kumar and V. Nallasenapathy, dismissed the petition filed by the Mistry family’s investment firms, saying it found no merit in the case.
The bench said Mistry was removed as chairman of Tata Sons, the group’s holding company, because its shareholders had lost trust in him. The tribunal rejected all of Mistry’s allegations and ruled that the parent of India’s largest conglomerate had the right to remove him as its chairman.“We have not found any purported merit or issues raised by the minority shareholder in his petition under the Section 241 and 242 of The Companies Act, 2013,” the NCLT bench ruled in a packed courtroom. It also found no merit in Mistry’s argument that Ratan Tata and Tata Sons’ trustee N.A. Soonawala interfered in the governance of Tata Sons.Mistry, whose family is the single biggest shareholder in Tata group, was named group chairman in November 2011 and took over in December 2012 after the retirement of Ratan Tata.
On 24 October 2016, the board of Tata Sons dismissed him as chairman and said former chairman Ratan Tata would take over as interim chairman. Mistry contended that the articles of association of Tata Sons are biased against the rights of minority shareholders and thereby oppressive, a charge Tata Sons dismissed, saying that Mistry, who had been on its board since 2006, had never raised this until he was fired.An order of NCLT can be challenged before the National Company Law Appellate Tribunal(NCLAT). NCLT in today’s ruling said it was not accepting Mistry’s contentions that his removal was due to the result of mismanagement by the board and oppression of minority shareholders of the group.Two months after Mistry was ousted as Tata Sons Chairman in October 2016, he and his family-run investment firm, Cyrus Investments, moved the NCLT. They moved the tribunal as minority shareholders against the corporate monolith and others, including Ratan Tata, alleging oppression and mismanagement.According to the statement issued by Mistry’s office today, matters like TTSL, Air Asia, ‘recovery of dues’ from serial entrepreneur C Sivasankaran, non-closure of a loss-making Nano, a struggling resolution of Tata Steel Europe and all present serious issues will be pursued.
