JULY 9, 2018
New Delhi: The National Company Law Tribunal (NCLT) today dismissed Cyrus Mistry’s plea, who had challenged his ouster as chairman of the Tata Group, according to television channel according to CNBC-TV18. 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 , 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 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.
The first allegation by Mistry was that his removal as chairman and subsequently as director of the board of Tata Sons was a result of oppression by promoters, who are in-turn owned by Tata Trusts that owns over 68% in Tata Sons. The second part of the plea focused on the alleged mismanagement by Tata Sons board and Ratan Tata which caused revenue loss for the group.