Cyrus Mistry
late Tribunal,” it said in a statement.
“It is not clear as to how the NCLAT order seeks to overrule the decisions taken by shareholders of Tata Sons and listed Tata operating companies at validly constituted shareholder meetings.”
Shares in group company Tata Motors fell 3%, Tata Global Beverages nearly 4% and Indian Hotels Company finished nearly 3% lower.
Setting aside a lower court order, the NCLAT quashed the conversion of Tata Sons into a private company from a public firm.
It also directed Tata Sons not to take any action against Mistry, whose family owns about 18% interest in Tata Sons.
The remaining 81% is held by Tata Trusts and Tata Group companies along with Tata family members.
Mistry, scion of the wealthy Shapoorji Pallonji family, had in December 2012 succeeded Ratan Tata as the executive chairman of Tata Sons, a post that also made him the head of all Tata group listed firms such as Tata Power and Tata Motors. In an overnight coup, he was removed as the chairman of Tata Sons in October 2016.
Along with him, the entire senior management too was purged and Ratan Tata was back at the helms of affairs four years after he took retirement.
Mistry challenged the removal before the Mumbai bench of National Company Law Tribunal (NCLT) but lost and then went in for appeal at the NCLAT.
Tatas had cited alleged failure of Mistry to “deliver on the promises that he had made at the time of his selection as the chairman” and inability to lead the group in a cohesive manner and failure in providing proper guidance and support to the group as the reasons for his sacking.
Mistry had contended that he was removed because of his “efforts to remedy past acts of mismanagement”, for resisting interference of Ratan Tata and for instituting a formal governance framework to regulate the role of the Tata Trusts.
The “legacy hotspots” included shutting down the small car Nano project; cutting losses with expensive decisions in firms such as Indian Hotels Company Ltd (IHCL) and Tata Teleservices Ltd; and Air Asia fraud.
The verdict will prompt Tata Sons chairman Natarajan Chandrasekaran and other leaders to focus on styming Mistry’s return.
“There will be a serious bout of concern and volatility for the group as a whole because many of the large companies are on the cusp of taking some very important decisions,” Ajay Bodke, chief executive officer at Prabhudas Lilladher Portfolio Management Services, told Bloomberg.
Tata Sons controls and invests in the group’s major companies and oversees 28 publicly listed firms.
The 151-year-old group employs, 7,00,000 people who make cars, blend tea, forge steel, sell insurance, write software, operate phone networks and packages salt among many more.
Ratan Tata had swelled group revenues more than 60-fold in his over two decades as chairman.
His campaign of expansion abroad included the troubled European steelmaker Corus Group Plc and marquee brands such as Land Rover, Jaguar, Tetley Tea and New York’s Pierre hotel.
With the slowdown in China, trade war, and Brexit concerns further damping European operations, Mistry was trying to unwind some of that recorded growth and pay back part of the debt that Tata had built up to pay for the acquisitions, when he was fired.