NCLT quashes Mistry plea against Tata Sons
Tribunal refuses waiver to Mistry firms from shareholding requirement for petition on mismanagement
The National Company Law Tribunal (NCLT) on Monday refused to grant a waiver to Cyrus Mistry family firms from the shareholding requirement of filing a petition alleging mismanagement and oppression of minority shareholders at Tata Sons Ltd.
The NCLT also dismissed the main petition. It had last heard the matter on 4 April, where it had reserved an order.
In the order, NCLT said that the waiver and petition have been dismissed, while a final order will be available on Friday.
The Mistry family firms will now be moving the National Company Law Appellate Tribunal (NCLAT) against NCLT’s decision once they receive a copy of the order.
Cyrus Investments Pvt. Ltd and Sterling Investments Pvt. Ltd had asked the NCLT to waive the requirement that shareholders hold at least 10% of a firm to file a petition alleging mismanagement and oppression.
They were seeking the waiver after the NCLT on 7 March ruled that their petition was not maintainable because of this technical requirement.
While, these companies hold 18.4% of ordinary shares in Tata Sons, when preference shares are counted, their ownership comes down to only about 2.17%.
Aryama Sundaram, counsel for the Mistry family firms, had argued for the waiver citing concerns on voting and veto rights accorded to Tata trustees on the board of Tata Sons.
“I’m a relevant shareholder of the Tata group. My issues are about voting rights and veto rights. These concern equity shareholders and not preference shareholders,” he argued. He said his allegations against the Tata group should be taken as “gospel truth”.
Earlier arguing for Tata Sons, Abhishek Manu Singhvi said Mistry’s petition for a waiver should be granted only if it is of national or public interest and if the petitioners do not have any other remedy.
“Not even one instance has been established,” Singhvi argued.
The spat between the Mistry firms and the Tatas started on 24 October when Mistry was removed as chairman of Tata Sons. He was later ousted from its board.