The National Company Law Tribunal (NCLT) on Monday rejected a petition filed by Cyrus Mistry, where he challenged his dismissal as chairman of Tata Sons and alleged mismanagement by the board and Ratan Tata.
According to media reports, NCLT’s main bench of Justice B.S.V. Prakash Kumar and Justice V. Nallasenapathy, delivered the judgment in an oral order to a packed courtroom. The reports said that the judges did not accept Mistry’s plea that his removal was because of alleged oppression of the group’s minority shareholders and mismanagement by the board of the country’s largest conglomerate.
The judges said in their order, according to reports, that the Tata Sons board was qualified to remove Mistry and that they had “lost confidence” in him after he reportedly sent out certain crucial information about the company to the income tax department, allegedly leaked details to the media and publicly came out against the company’s shareholders and its board.
Tata Sons, in a statement, welcomed the judgment. “The judgment has only re-affirmed and vindicated that Tata Sons and its operating companies have always acted in a fair manner and in the best interest of its stakeholders. The Tata group has always been committed and will continue to be committed to transparency and good corporate governance of global standards,” said N Chandrasekaran, chairman of Tata Sons, in the statement.
“Tata Sons hopes that a finality will be given to the judgment of NCLT, Mumbai, by all concerned in the larger interest of companies, the shareholders and the public,” the Tata Sons chairman added.
The legal battle is expected to go on. “The ruling is line with the earlier position expressed by the tribunal. An appeal on the merits will be pursued,” Mistry’s office said in a statement.
“Matters like Tata Teleservices Ltd, AirAsia, recovery of dues from Siva [C Sivasankaran], non-closure of a loss-making Nano, a struggling resolution of Tata Steel Europe, all present serious issues that will be pursued. Not only the facts that were under consideration but also subsequent facts and developments that continue to evidence oppression and mismanagement will be under scrutiny and will be pursued in full earnest,” the statement from Mistry added.
Mistry was removed as chairman of Tata Sons on October 24, 2016. Through his investment firms—Cyrus Investments and Sterling Investment Corp—he filed a petition with the NCLT under Section 241 and 242 of the Companies Act, challenging his dismissal as chairman and mismanagement by the Tata Sons board.
After Mistry’s initial petition was dismissed by the NCLT on the ground that he didn’t have adequate shareholding to claim oppression, the National Company Law Appellate Tribunal (NCLAT) ordered the NCLT to take up the plea on September 24, 2017. Hearings of the case went on from October 2017 to February 2018 at the main bench of the NCLT in Mumbai.