Mistry moves SC seeking directorship at Tata Sons
MUMBAI: Cyrus Mistry and his investment firms have filed a fresh petition in the Supreme Court, pleading that they be granted directorship in Tata Sons Ltd.
In the petition filed on February 13, the Mistry firms—Cyrus Investments Pvt. Ltd and Sterling Investments Pvt. Ltd— which together own 18.4% of ordinary shares in Tata Sons, said the National Company Law Appellate Tribunal (NCLAT) did not grant them the reliefs that they had sought.
In its order on December 13, NCLAT had found faults in the conduct of Tata Sons, which controls the Tata group, finding them oppressive towards minority shareholders.
The appellate tribunal held as illegal the appointment of N Chandrasekaran as Tata Sons’ chairman succeeding Cyrus Mistry. The NCLAT also reinstated Mistry’s directorship in Tata Consultancy Services, Tata Teleservices (Maharashtra) and Tata Industries Ltd. This was for the remainder of his tenure, which was just about five months.
These reliefs granted by NCLAT were not sought by Mistry firms. On the other hand, they had sought to limit interference by trustees of Tata Trusts in the affairs of Tata Sons and had sought directorship on its board, according to the petition.
The NCLAT order had refrained from granting certain reliefs that were warranted and reasonably necessary in the facts and circumstances of the case, particularly since the NCLAT is the last forum for findings of fact, said Mistry firms in the appeal.
“Given the nature of Tata Sons being that of a two group company and the huge stake that the appellants (Mistry firms) have in Tata Sons, the relief that ought to have been granted was that the appellants be granted proportionate representation on the board of directors of Tata Sons and representation on all committees formed by the Board of Directors of Tata Sons,” according to the petition.
The firms are also seeking that the controversial Article 75 present in Articles of Association
of Tata Sons be struck down. They claimed that the Article ‘is draconian and confiscatory in nature’. Under this Article, Tata Sons has the power to ask shareholders to sell their holdings by passing a special resolution, a rule that can be potentially used to force the Mistry family firms to exit the holding company of the Tata group. The NCLAT in its judgement had directed the nominees of Tata Trusts to not interfere in the affairs of Tata Sons.
Mistry firms said in the petition that this was not enough and the direction should be passed against all trustees.
“Trustees of the majority shareholders who even though not on the board of Tata Sons were interfering with the decision making processes of the board of directors,” Mistry firms alleged in the petition.