Appellate tribunal’s decision to make Supreme Court / Cyrus Mistry chairman of Tata Sons
The Supreme Court stayed the decision of the National Company Law Appellate Tribunal (NCLAT) on Friday in the Ceres Mistry case. The bench of Chief Justice SA Bobde gave this stay. Tata Sons challenged the judgment of the Appellate Tribunal on 18 December in the Supreme Court. The tribunal had ordered reinstatement denouncing the decision to remove Mistry as chairman of Tata Sons. Tata Sons removed Mistry from the post of chairman in October 2016, saying he did not trust him.
Tribunal proceeded with Mistry’s appeal: Supreme Court
The Supreme Court’s stay will apply to the entire ruling of the Appellate Tribunal. That is, Mistry will also not find a place in the board of Tata group companies, while the tribunal ordered Mistry to be made a director. The Supreme Court said that there were basic mistakes in the tribunal’s decision, we have heard the case in detail. Mistry had not only appealed for reinstatement to the post of chairman, but the tribunal gave the order. The Supreme Court has also issued a notice to Mistry. The Supreme Court has ordered Tata Sons not to use Section 75 of the company’s Articles of Association. That is, Tata Sons Minority cannot force shareholders to sell shares. The Mistry family owns 18.4% shares of Tata Sons.
Senior advocate CA Sundaram argued for Cyrus Investment Pvt Ltd, a company owned by the Mistry family. He had appealed that instead of staying the order of the tribunal, he should seek a reply by giving two weeks notice. However, the Supreme Court said that the decision of the tribunal did not seem right at first sight. The Egyptian side also appealed for an interim arrangement but was rejected. Lawyer NK Kaul was represented on behalf of Cyrus Mistry and advocate Shyam Dewan on behalf of shareholders of Mistry side. Tata Sons were favored by Abhishek Manu Singhvi, Harish Salve, Mukul Rohatgi and Mohan Parasaran.
Tata Sons argue – Tribunal verdict damaging to corporate democracy
Mistry challenged Tata Sons’ decision to be removed from the post of Cherryman in the National Company Law Tribunal (NCLT), but lost. After this, the Appellate Tribunal was reached. The Appellate Tribunal ruled in favor of Mistry. On the other hand, Tata Sons argued that the decision of the Appellate Tribunal is detrimental to the rights of Corporate Democracy and Board of Directors.
Would like to ensure a seat on the board of Tata Sons: Mistry
Mistry had already said before the Supreme Court ruling that he was not keen on becoming the chairman of Tata Sons or a director of TCS, Tata Tele or Tata Industries. But, as a minority shareholder, all options will be adopted to protect their rights. These include getting a place on the board of Tata Sons, this has been history for the last 30 years. Improving corporate governance and bringing transparency to Tata Sons is also a priority.
Mistry lacked leadership qualities, it hurt Tata Group’s reputation: Ratan Tata
The Mistry family owns 18.4% shares of Tata Sons. Tata Sons is the holding company of the Tata Group. Tata Trusts hold 66% of its shares. Tata Trust chairman Ratan Tata. The Appellate Tribunal also convicted Ratan Tata in the case of the removal of Mistry. Ratan Tata has also challenged this decision in the Supreme Court. He says the tribunal gave the verdict without facts or legal basis. Mistry lacked leadership qualities, which damaged the reputation of the Tata group.
Mistry became the chairman of Tata Sons after Ratan Tata’s retirement in 2012. Mistry resigned as director of other Tata Sons companies in December 2016 after his removal from the post of chairman and moved to NCLT. After this, Mistry was also removed from the board of Tata Sons.
