NCLAT Dismisses Mistry Plea to Stall Exit from Tata Board
Mistry family firms argued that his proposed removal from Tata Sons board was improper
Mumbai: National Company Law Appellate Tribunal (NCLAT) in New Delhi dismissed Cyrus Mistry family firms’ appeal to stop Tata Sons from removing its former chairman from its board at the shareholder meeting scheduled on February 6. The family firms — Cyrus Investments Pvt Ltd and Sterling Investments Pvt Ltd — argued that his proposed removal from Tata Sons board was improper as National Company Law Tribunal in Mumbai on December 22 had asked both the parties to not take any action on the subject matter of the case. They had also asked the Appellate Tribunal to pass a judgement on the maintainability of the main petition filed by them on December 19, where they had alleged oppression of minority shareholder rights and mismanagement at the Tata Group.
Tata Sons declined to comment on the development, while mail sent to Cyrus Mistry's office did not elicit a response until the time of going to press.
Tata Sons board directorship is Mistry's only position in the $103 billion salt-to-software conglomerate after he resigned from all the boards of companies on December19.
The unexpected ouster of Mistry sent shockwaves across Corporate India and soured the relationship between two largest shareholders of the Group. Mistry's family firms hold18.4% stake in Tata Sons. Rest of the equity shares are held by Tata Trusts and Tata group companies. The hearing on the main petition is schedule for Februa- ry 13 and 14.Tata Sons offered to keep a seat vacant on the board until the matter is resolved regarding the main petition filed by Mistry's family firm.
“NCLAT has kept all the contentions open. They want the petition to be heard first. They don't want to deal with questions at this stage before the main petition is heard and disposed of,” said a lawyer involved with the matter. “It's not a position (Tata Sons director) we covet so much. We will focus on the main petition.”The 344-page petition was served on 23 people that include industrialists Ajay Piramal and Venu Srinivasan, Harvard Business School dean Nitin Nohria, country head of private equity fund Bain Capital Amit Chandra, retired bureaucrat Vijay Singh and former Tata veteran NA Soonawala.