Tata Sons on Thursday moved the Supreme Court against the NCLAT judgement reinstating Cyrus Mistry's as the executive chairman of Tata Sons.
The salt-to-software Group has sought a stay on it in the wake of TCS board meeting scheduled to be held on 9 January.
Tata Sons, the holding company of the salt-to-software conglomerate, has moved the Supreme Court, challenging Cyrus Mistry's reinstatement as chairperson and director on board of the group coshttps://t.co/a6gWF3mSvo
— CNBC-TV18 (@CNBCTV18Live) January 2, 2020
On 18 December, directed the $110-billion Tata group to reinstate Cyrus Mistry as the executive chairman of Tata Sons. The National Company Law Appellate Tribunal (NCLAT) also held the appointment of present executive chairman, N Chandrasekaran illegal. However, the tribunal had said the restoration order would be operational only after four weeks, the time allowed to Tatas to file an appeal, PTI reported.
#TataSons move #SupremeCourt against reappointment of Cyrus Mistry as company's chairman. The firm seeks a stay on the NCLAT's order too in the wake of TCS board meeting on Jan 9. Tata's lawyers will seek urgent hearing from SC on Jan 6 when the court reopens | @News18Courtroom — Utkarsh Anand (@utkarsh_aanand) January 2, 2020
Mistry was reappointed chairman of Tata Sons and three group companies — TCS, Tata Industries, and Tata Teleservices
Tata Sons sought the stay on the tribunal’s order till its appeal is decided in view of the TCS board meeting on 9 January. An urgent hearing has been sought on 6 January when the SC reopens after winter break.
The NCLAT on 18 December directed the conglomerate to reappoint Cyrus Mistry as chairman of Tata Sons and three group companies – TCS, Tata Industries and Tata Teleservices (Maharashtra).
Legal experts told The Economic Times the Mistry family-owned firms that hold stakes in Tata Sons can oppose an interim stay, which could force the Tatas to re-induct Mistry pending a final order.
The company wants to avoid a board meeting and complicate the situation, a source was quoted as saying in the report. “There is no emergency situation. It is a matter that will be pursued legally,” the source said.
Mistry, a scion of wealthy Shapoorji Pallonji family, was in a coup removed as Chairman of Tata Sons in October 2016. He was the sixth chairman of Tata Sons and had taken over in 2012 after Ratan Tata. He was later also removed as director on board of Tata Sons.
However, Mistry and Tata family patriarch Ratan Tata had reportedly falling out over key investment decisions, including manufacturing of world's cheapest car Nano.
Mistry, whose family owns 18.4 percent stake in Tata Sons, challenged his removal in the National Company Law Tribunal (NCLT). The case of oppression and mismanagement against Tata Sons and 20 others, including Ratan Tata, filed by Mistry family entities - Cyrus Investments and Sterling Investments - were however in March 2017 dismissed by the NCLT ruling that they were not eligible to pursue the allegations.
Section 244 of the Companies Act, 2013 allows a shareholder of a company to bring an oppression and mismanagement case against the firm if it holds not less than one-tenth of the issued share capital.
On appeal, the Cyrus Mistry firms had secured a partial win at the NCLAT, which waived the 10 percent shareholding requirement but remitted the matter to the NCLT.
Earlier, the Mumbai bench of the National Company Law Tribunal (NCLT) had dismissed the petitions filed by the two investment firms Cyrus Investments Pvt Ltd and Sterling Investments Corp challenging Mistry' removal.
Later, Mistry had also personally approached the NCLAT over the NCLT order.
The Mistry camp had challenged the 9 July order of the Mumbai bench of the NCLT which dismissed the pleas against his removal as Tata Sons chairman, as also the allegations of rampant misconduct on part of Ratan Tata and the company's board.
A special bench of the tribunal had held that the board of directors at Tata Sons was “competent" to remove the executive chairperson of the company. The NCLT bench had also said that Mistry was ousted as chairman because the Tata Sons' Board and its majority shareholders had “lost confidence in him".
Two months after his removal, Mistry's family-run firms approached the NCLT as minority shareholders, against Tata Sons, Ratan Tata, and some other board members.
Mistry in his pleas primarily argued that his removal was not in accordance with the Companies Act and that there was rampant mismanagement of affairs across Tata Sons.
--With inputs from agencies
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Updated Date: Jan 02, 2020 12:19:19 IST