New Delhi: Big Relief for Ratan Tata. The National Company Law Tribunal (NCLT) delivers its judgement on a petition filed by Cyrus Mistry on Monday challenging his ouster as chairman of the Tata Group. NCLT dismisses Cyrus Mistry’s plea.
The NCLT was expected to deliver its judgement last week but had adjourned it to 9 July. Mistry’s family owns over 18% stake in Tata Sons, the holding company of Tata Group, though holding with voting rights is only under 4%. Mistry had taken over as the chairman of Tata Group in 2012 after Ratan Tata announced his retirement.
Mistry, who was the sixth chairman of the Tata Sons, was ousted from the position in October 2016. Two months later, Mistry and his family-run investment firm, Cyrus Investments, approached the NCLT, as minority shareholders, against Tata Sons and others including Ratan Tata alleging oppression and mismanagement.
Mistry, in the petition filed under the Companies Act, claimed that his removal was a result of mismanagement by the board’s trustees and oppression of minority shareholders of the group. 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.
After his ouster as chairman, five months later, Mistry was also removed from the post of director of Tata Sons’ Board. The Tata group rebutted the allegations and said Mistry’s removal was because the board had lost confidence in him.
The Tata group argued that the law clearly allows removal of a chairperson and director and Mistry was removed by a majority of 7 out of 9, as Mistry had not voted for his removal and another official had abstained.