NCLAT Dis­misses Mistry Plea to Stall Exit from Tata Board

Mistry fam­ily firms ar­gued that his pro­posed re­moval from Tata Sons board was im­proper

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

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.

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