By Promit Mukherjee and Euan Rocha
MUMBAI Tata Sons' ousted chairman Cyrus Mistry, in his first legal salvo against the conglomerate, has appealed to a quasi-judicial body to either replace the company's current board, or appoint a retired Supreme Court judge as non-executive chairman.Mistry ratcheted up his battle versus the $100 billion salt-to-software conglomerate by filing a petition with the National Company Law Tribunal (NCLT) on Tuesday.The complaint levels allegations on mismanagement and corporate governance failures within the company, while also seeking to restrain Tata Sons from issuing any new equity or altering its articles of association, according to a copy of the petition seen by Reuters on Wednesday.After resigning from the boards of listed Tata entities on Monday, Mistry vowed to keep up the fight to improve governance norms in the nearly 150-year-old conglomerate.Mistry's petition alleges that Tata Sons abused its articles of association by "protecting the legacy left behind" by Ratan Tata, by continuing to invest in its "doomed Nano car project" and continuing to stick by its loss-making European assets that were acquired under Tata's watch before he retired in 2012.
Tata has returned as interim chairman of Tata Sons following Mistry's ouster as chairman in October.Mistry has filed his claims under section 241 and 242 of the Companies Act of 2013 that deal with shareholder oppression and mismanagement. Mistry's Shapoorji Pallonji family own a roughly 18 percent stake in Tata Sons, with Tata Trusts - a cluster of public charities - owning a controlling 66 percent stake in the holding company. The Trusts are currently chaired by Tata.
Mistry, who maintains he was illegally ousted as chairman, has for weeks waged a public war against the company and Tata. The complaint also details Mistry's allegation that Tata and his long-time aide Noshir Soonawala, both trustees of Tata Trusts, undermined group company boards by demanding a say in key internal matters years after they had retired. He has also alleged malfeasance in the award of certain contracts by Tata entities and fraud at one of the group's aviation ventures.
Mistry has asked the tribunal to restrict Tata Sons from initiating any new line of business, or acquiring any new business without the permission of the tribunal. Tata Sons has repeatedly rejected Mistry's allegations and dubbed them as "baseless, unsubstantiated and malicious".In its statement on Tuesday, Tata Sons said it had followed the highest standards of corporate governance, while adding that it "views the petition as an unfortunate outcome". (Reporting by Promit Mukherjee and Euan Rocha; Editing by Himani Sarkar)
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Updated Date: Dec 21, 2016 21:53:23 IST