The National Company Law Tribunal (NCLT) on Monday dismissed a petition filed by Cyrus Mistry challenging his dismissal as chairman of Tata Sons.
“We have not found any merit in the petition,” the law tribunal said. “The management is more accountable to shareholders,” it said while ruling in favour of Ratan Tata.
Mistry was removed as the Tata Sons board and a majority of its members lost confidence in him, the NCLT Mumbai’s main bench of B S V Prakash Kumar and V Nallasenapathy said in a judgement.
The tribunal said it was not accepting Mistry’s contentions that his removal was due to the result of mismanagement by the board and oppression of minority shareholders of the group.
Mistry was removed because the board and majority of its members lost confidence in him after he sent out certain crucial information about the company to the I-T department, leaked details to the media and came out openly in public against the company’s shareholders and its board, the bench said.
“The ruling of the National Company Law Tribunal is disappointing although not surprising,” a statement from Mistry’s office said. It said that an appeal on merits will be pursued. “…as shareholders who have always supported the Tata Group, it remains our duty to protect it from those were destroying value and making the Group vulnerable to external forces,” it said.
Mistry, in the petition filed under the Companies Act, claimed that his removal was due to a result of mismanagement by the board’s trustees and oppression of minority shareholders of the group.
He had taken over as the chairman of Tata Sons group in 2012 after Ratan Tata announced his retirement. Mistry, who was the sixth chairman of the Tata Sons, was ousted from the position in October 2016.
Two months later, Mistry and his family-run investment firm, Cyrus Investments, approached the NCLT, as minority shareholders, against the corporate monolith and others including Ratan Tata alleging oppression and mismanagement.
Mistry in his plea claimed that his removal as chairman was without reason and amounted to the majority shareholders suppressing the right of the minority to ask questions about matters involving the company.
As per the plea, Mistry was five months later also removed from the post of director of Tata Sons’ Board for approaching NCLT.
News credit : Indiatoday