Commercial ambition sole motive of Mistry, Tata tells apex court
Grievance is only about his removal as chairman: Tata
Making an emotional appeal to the Supreme Court to reject Cyrus Mistry’s petition, the patriarch of the Tata group, Ratan Tata, said commercial ambitions of the former Tata Sons chairman were behind the dispute. Tata said it was about Mistry’s removal as a director from the Tata Sons board, and not the rights of minority shareholders.
In his counter-affidavit filed with the apex court, Tata, 82, justified his actions as group chairman while acquiring companies like Corus Steel and Jaguar Land Rover, which Mistry had termed as “legacy hot spots” soon after he was removed from the group in October 2016. Mistry had alleged that these acquisitions had resulted in huge value erosion for the Tata group and impacted his own performance as chairman. Mistry had replaced Tata, who retired in 2012 after heading the group for 20 years. However, he was removed four years later by the Tata Sons board on grounds of non-performance.
“At this stage of my life and career, I would not like to either explain or defend my performance as chairman of Tata Sons and of the other Tata companies whose board I chaired during my tenure. It is for the companies and their stakeholders to judge,” Tata said. “However, one thing I would like to clarify and reiterate is that throughout the past several decades that I have served the Tata group in various capacities, I have been solely guided by the interest of this group and its enduring legacy, which cannot be judged in numbers alone and goes beyond return on investment and costs of capital.”
“AT THIS STAGE OF MY LIFE AND CAREER, I WOULD NOT LIKE TO EITHER EXPLAIN OR DEFEND MY PERFORMANCE AS CHAIRMAN OF TATA SONS... IT IS FOR THE COMPANIES AND THEIR STAKEHOLDERS TO JUDGE”
RATAN TATA, chairman emeritus, Tata group
He said it was important to understand and preserve this aspect, which defined the credo of the Tata group and had been the basis of the unwavering support and goodwill of its millions of shareholders through the high and lows.
Both the Tata group and Mistry are locked in a three-year dispute over the rights of minority shareholders, including board representation.
The Mistry family owns 18.5 per cent in Tata Sons, the holding company of the Tata group, while the Tata Trusts, chaired by Tata, owns 66 per cent. The rest is held by various Tata group companies.
The legal dispute erupted after Mistry was removed as chairman of Tata Sons. Apart from Tata, the Tata Trusts also filed its reply to the Supreme Court, and said it was commercial ambitions of the Mistry family which was the crux of his petition and had nothing to do with the oppression of Tata Sons shareholders.
Tata, who during his tenure led the India-focused group to become a global conglomerate, said Mistry’s allegation of oppression and mismanagement of minority shareholders was not maintainable and the grievance was only about Mistry's removal.
“As per Mistry ’s own case, their (Mistry family’s) shares in Tata Sons, as against their total investment of ~69 crore from 1965, are today valued above ~1 lakh crore (assuming, without in any manner admitting , such valuation as true), it only underscores the incredible irony of t heir case t hat t hey are oppressed,” Tata said in his filing.
Tata said serious allegations were made particularly against him, which ranged from ridiculing his attempt to offer affordable and safe family vehicle Tata Nano to the people of this country, to even linking him and his colleague as “global terrorists" – an allegation which the NCLT found “abominably baseless” and “scurrilous”.
“ln all this, Mistry, on the strength of accusations and half-truths, exhibited a limitless capacity to run a smear campaign, particularly against me and some of my colleagues who served with me in Tata Sons and trustees of the Tata Trusts,” he said.
Tata said the Mistry had also referred to the allegedly "value destroying investment transactions that took place during his tenure. Such comments to selectively question past business decisions, with the benefit of hindsight vision, show the immaturity and the short sightedness with which appellants look at things”.
“It is another matter that the appellants while making an appraisal of company's performance during my tenure …had praised the performance. For instance, at the company's annual general meeting of shareholders in 2007, when I was chairman, Pallonji S Mistry had congratulated me and the company for the financial results and the growth and performance of Tata Sons and various Tata companies,” Tata said.
“I s ay t h i s n o t to d e f e n d o r s e l faggrandise my performance and contribution; nor is this honourable court, in my re sp ec tful submission, t he appropriate forum to debate or analyse such business performance issues. I point out the above-mentioned record only to show how opportunistic and selective the appellants have been in their conduct in presenting their case,” Tata said.
Tata said the case of quasi-partnership set up by the Mistry family was selfserving, and an afterthought, not clearly pleaded and was neither factually, not legally correct in the context of the case.
“The thrust of the cross-appeal is Mistry’s claim to proportionate representation on the Board of Tata Sons based on principles of quasi-partnership. However, it was not part of their original company petition. The Mistry’s case on quasi-partnership has been an after-thought, introduced through written notes and in course of oral arguments,” Tata said.