SC stays NCLAT order reinstating Cyrus Mistry as TATA SONS’ Executive Chairman 

C:\Users\Smita\Downloads\tata.jpg
Picture courtesy to HT

Cyrus Pallonji Mistry, an Irish businessman of Indian origin, suffered a jolt  on Friday, January 10, after The Supreme Court of India stayed the NCLAT order reinstating him as executive chairman of the Mumbai  headquartered USD 110 billion Tata Group. The apex court termed the tribunal’s direction to reinstate Mistry as untenable in law and inconsistent with the Companies Act. The court will next hear the matter after four weeks. The house has contested NCLAT order in the apex court. A  SC bench headed by Chief Justice S A Bobde and comprising Justices B R Gavai and Surya Kant agreed to hear Tata Sons’ plea challenging the National Company Law Appellate Tribunal (NCLAT) order and issued notices to Mistry and others. Tata Sons Private Ltd (TSPL) challenged the December 18 decision of NCLAT that gave a big relief to Cyrus Investment Pvt Ltd and Mistry, restoring him as the executive chairman of TSPL.The National Company Law Appellate Tribunal also ruled that the appointment of N Chandrasekaran as head of the holding company of the USD 110-billion salt-to-software conglomerates was illegal. TATA Sons moves SC contesting NCLAT order restoring Cyrus Mistry as its Executive Chairman.Tata Sons has sought to stay on the company law tribunal’s order as well as it declaring the selection and appointment of N Chandrasekaran as chairperson of the holding company was “illegal”. Business newspapers have quoted a lawyer associated with one of the country’s oldest and largest corporate houses saying: “We have challenged the NCLAT decision in its entirety” in the country’s apex court. The NCLAT has stayed the operation of the judgement with respect to reinstatement of Mistry for four weeks from December 18, 2019 to allow the Tatas to appeal. The NCLAT has also quashed the conversion of Tata Sons into a private company from a public firm. The petition filed by the Tata Sons has sought direction from the apex court to set aside or quash the findings of the tribunal which held that the group’s chairman emeritus Ratan Tata’s actions against Mistry were oppressive. It also directed Tata Sons not to take any action against Mistry whose family owns some 18 per cent interest in Tata Sons. The remaining 81 per cent is held by Tata Trusts and Tata Group companies along with Tata family members. Mistry belonging to the wealthy Shapoorji Pallonji family had in December 2012 succeeded Ratan Tata as the Executive Chairman of Tata Sons becoming the head of all Tata group listed firms such as Tata Power and Tata Motors. He was removed as the Chairman of Tata Sons in October 2016. Along with him the entire senior management was also shown the exit door. Ratan Tata, doyen of Indian industry, returned as the head of the Tata Sons four years after retirement. Mistry had challenged his removal before the Mumbai Bench of National Company Law Tribunal 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, an Irish businessman of Indian origin based in Mumbai, 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 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. Tata Sons had said the NCLAT ruling “has created confusion in the working of important corporate entities, some of which are listed companies”. (picture courtesy to HT .edited by PK Chakravarty)

Leave a Reply

Your email address will not be published. Required fields are marked *