The Mumbai Bench of the National Company Law Tribunal (NCLT) on Monday ruled in favour of Tata Sons dismissing Cyrus Mistry’s plea for his illegal removal as the company’s chairman. NCLT said that the board of directors are competent to remove executive directors and Cyrus Mistry was removed because Tata Sons Board and its members lost confidence in him. The verdict has pulled the curtains down on the bitter 18-months feud between Tata Sons and the dismissed chairman Cyrus Mistry setting a landmark precedent for corporate feuds.
After Ratan Tata announced his retirement Mistry had taken over as the chairman of Tata Sons group in 2012. Mistry was the sixth chairman of the Tata Sons and was removed from his position in October 2016.
B S V Prakash Kumar and V Nallasenapathy of NCLT Mumbai’s special bench earlier deferred the date to July 9 as the judgement was not ready. Mistry, in the petition filed under the Companies Act, claimed that his removal was due to a result of mismanagement by the board’s trustees and oppression of minority shareholders of the group.
Cyrus Mistry was first removed from the Chairman post in Tata Sons on October 24, 2016. Later, on November 9, Tata Sons sacked Mistry as Chairman of TCS. On November 15, Tata Global Beverages removed Mistry as Chairman and on November 25, Tata Steel sacked him as Chairman.
After his removal from the post, two months later, Mistry and his family-run investment firm, Cyrus Investments, approached the NCLT, as minority shareholders, against Ratan Tata alleging oppression and mismanagement. Mistry in his plea claimed that his removal as chairman was without reason and amounted to the majority shareholders suppressing the right of the minority to ask questions about matters involving the company.
He was appointed at the behest of Tata Trusts and his removal cannot be questioned by minority shareholders, the group’s counsel, Abhishek Manu Singhvi, had argued before the tribunal.
(With PTI Inputs)