NCLAT backs Mistry's reinstatement as chairman of Tata Sons

 NCLAT backs Mistrys reinstatement as chairman of Tata Sons

By Aditi Shah

NEW DELHI (Reuters) - Cyrus Mistry, who has been embroiled in a legal battle with Tata Group since being ousted in 2016, won backing from a tribunal to be reinstated as executive chairman of its holding company, lawyers said on Wednesday.

Holding company Tata Sons has four weeks to file an appeal with the Supreme Court over the ruling of the quasi-judicial National Company Law Appellate Tribunal (NCLAT), one of the lawyers representing the Tata Group said.

Mistry, who was ousted over charges of shareholder oppression and mismanagement, called the judgment "a victory for the principles of good governance and minority shareholder rights".

"The outcome of the appeal is a vindication of my stand taken when the then board of Tata Sons, without warning or reason, removed me, first as the executive chairman and subsequently as a director of Tata Sons," Mistry said in a statement.

Tata Sons said in a statement the company would take appropriate legal recourse.

It also sought to assure its stakeholders that it has always operated in a "fair and equitable manner" and "acted in accordance with the law and will continue to do so".

Shares in group company Tata Motors fell 3%, Tata Global Beverages fell nearly 4% and Indian Hotels Company finished nearly 3% lower.

Mistry had also contested his removal as chairman, accusing the group of not following due process and alleged inappropriate interference in the company's affairs by family patriarch and the conglomerate's former chairman, Ratan Tata.

The NCLAT two-judge bench in its 172-page order sided with Mistry. It deemed the appointment of current Tata Sons chairman, N Chandrasekaran, illegal and asked Ratan Tata not to interfere with matters. The tribunal also ordered that Mistry be reinstated as director of Tata Group companies.

"It is a landmark ruling underlining the need for a board to be the effective institution for governing a company," said Somasekhar Sundaresan, an advocate representing Mistry.

Tata Group is one of India's oldest and biggest conglomerates with interests in sectors including technology, steel and automobiles.

The clash between Mistry and Ratan Tata has been one of the most high-profile and publicly fought corporate battles in India.

Mistry is a scion of the Shapoorji Pallonji family that holds a minority stake in Tata Group.

Tata Trusts, a group of public charities, owns a controlling 66% stake in holding company Tata Sons and is chaired by Ratan Tata.

(Reporting by Aditi Shah in New Delhi, additional reporting by Derek Francis and Chandini Monnappa in Bengaluru; editing by Rashmi Aich and Elaine Hardcastle)

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Updated Date: Dec 19, 2019 00:07:02 IST