Former chairman of Tata Sons, Cyrus Mistry, who was removed as director from its board at an extraordinary general meeting on Monday, is set to continue his legal fight with the Tatas.
Vaibhav Agarwal, head of research, Angel Stock Broking said, “(With the removal), the board has tried bring to an end the uncertainty over the management and control of Tata group companies, which brings the focus back to business issues. The legal battle between the two sides, however, is likely to continue . ”
TCS CEO N. Chandrasekharan had earlier been named as chairman of Tata Sons and will take charge on February 21.
The Tata Sons board has not kept a director’s seat vacant pending verdicts in ongoing court cases. The National Company Law Appellate Tribunal (NCLAT) on Friday rejected a case filed by Mr. Mistry’s investment firms against the shareholders’ meeting called for by the Tata group’s holding firm to seek his removal. Tata Sons advocate Abhishek Manu Singhvi had requested the NCLAT to allow the EGM to take place and that the company would offer to keep one seat vacant on the board for 30 days.
After resigning from six Tata group firms in December, Mr. Mistry, in an interview to The Hindu, had said that he would shift his ‘fight for governance’ at the Tata group to a ‘legal platform’. “I had always said that we will take it to the next level,” Mr. Mistry had said before filing a petition with the National Company Law Tribunal.
“It’s going to be a long-drawn legal battle,” said investment advisor S.P. Tulsian. “After NCLT, the case will go to High Court and then to the Supreme Court,” he said. Mr. Mistry was not immediately available for comments.
With Mistry’s removal, the Shapoorji Pallonji family loses its representation on the Tata Sons board for the first time in a decade. Cyrus Mistry’s father Palloni Shapoorji Mistry was on the board of Tata Sons from 1980 till 2004 and Cyrus Mistry joined the Tata Sons board in 2006. Mr. Mistry’s family has been a stakeholder in Tata Sons since 1965.
Cyrus Mistry, who continued on the board of various Tata firms even after his removal as chairman of Tata Sons on October 24, resigned from all Tata firms (except Tata Sons) as director in December to shift his fight to a larger platform.
The Mistry family’s investment firms — Cyrus Investments Pvt. Ltd and Sterling Investments Pvt. Ltd — filed a suit at the National Company law Tribunal (NCLT) on December 20 alleging mismanagement at Tata Sons and oppression of minority shareholders. The outcome of the case is pending.
