Tatas’ removal of Mistry is legal: Supreme Court

NEW DELHI: The Supreme Court on Friday set aside a tribunal’s 2019 order reinstating Cyrus Mistry as the executive chairman of the over $100 billion Tata Sons, describing Mistry as someone who “set his own house on fire” and turned out to be “wrong decision of a lifetime” for Ratan Tata.

The court also answered all questions of law in the case in favour of Tata Sons, ruling that Tata Sons’ actions did not amount for mismanagement or oppression of minority shareholders. It also denied the Sharpoorji Pallonji (SP) group, which has a 18.37% stake in Tata Sons, proportionate representation reflecting its shareholding in the company. The court also said it was between Tata Sons and Mistry and his group to work out terms for separation, and declined to put a number to Shapoorji Pallonji group’s holding in Tata Sons.

In its 282-page judgment, a bench led by Chief Justice of India (CJI) SA Bobde reproached Mistry for accusing Ratan Tata of acting like a “shadow director” in a plot to veto him out as the executive chairman of Tata Sons through a board meeting in October 2016.

“If someone, aggrieved after his removal from office can engage in shadowboxing through the companies controlled by him, he cannot accuse the very same person who chose him as successor to be a shadow director. Someone who gained entry through the very same door, cannot condemn it when asked to exit,” said the bench, which also included justices AS Bopanna and V Ramasubramanian.

In a statement, Ratan Tata said that the court’s order, coming as it does “after relentless attacks on my integrity and the ethical conduct of Tata Sons is a validation of the values and ethics that have always been the guiding principles of the group”.