TATA Sons moves SC contesting NCLAT order restoring Cyrus Mistry as its Executive Chairman 

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The Supreme Court of India is expected to hear  Tata Sons’ plea challenging the NCLAT verdict restoring Cyrus Mistry as the executive chairman of the Mumbai based holding group showing the door to the incumbent N Chandrasekaran saying his appointment was illegal. 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 of over $ 110 billion salt-to-software conglomerates as “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, the 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 the 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. (edited by PK Chakravarty)

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