The Tata Group is likely to move the Supreme Court against National Company Law Appellate Tribunal (NCLAT’s) order to restore Cyrus Mistry as the executive chairman of Tata Sons Ltd. and director on the board of other Tata companies for the rest of the tenure.
The group is studying the order to decide on the future course of action.
“It is not clear as to how the NCLAT order seeks to overrule the decisions taken by shareholders of Tata Sons and listed Tata companies at validly constituted shareholder meetings.
“The order appears to even go beyond the specific reliefs sought by the appellant. Tata Sons strongly believes in the strength of its case and will take appropriate legal recourse,” said Shuva Mandal, group general counsel, Tata Sons.
The NCLAT said the sixth meeting of the board of directors of Tata Sons held on October 24, 2016, so far as it relates to removal and other actions taken against Mr. Mistry, is declared illegal and is set aside.
“Today’s judgment is not a personal victory for me, but is a victory for the principles of good governance and minority shareholder rights. For over 50 years, the Mistry family, as the significant minority shareholder of Tata Sons, has always endeavoured to play the role of a responsible guardian of an institution that the entire nation is proud of,” said Mr. Mistry in statement.
The NCLAT, at the request on Tata Sons counsel Abhishek Manu Singhvi, has suspended a part of the judgment relating to replacement of the present executive chairman N. Chandrasekaran and reinstatement of Mr. Mistry as executive chairman of Tata Sons for a period of four weeks, meaning Tata Group can approach the Supreme Court to appeal against the NCLAT order.
However, the other directions, including the one ordering reinstatement of Mr. Mistry as director of Tata Sons and of three Tata companies shall be complied forthwith.
“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,” said Mr. Mistry.
Stand vindicated
“[The] Tatas now need to offer seat to Mr. Mistry on the board of Tata Sons and other companies of Tata Group. Our stand is vindicated by the NCLAT order,” Somasekhar Sundaresan, counsel for Mr. Mistry told The Hindu.
“Tata Sons assures its stakeholders that it [always] acted in accordance with the law and will continue to do so,” Mr. Mandal added.
According to Mr. Mistry, for the Tata Group to prosper as an institution, it is important that the management of individual companies, their boards, the management of Tata Sons, the board of Tata Sons and the shareholders of Tata Sons, all work harmoniously within a robust governance framework, that in substance and form, protects the rights of all stakeholders, including shareholders, investors and the Tata Group employees who represent the strongest asset of the group.
“I believe it is now time that all of us work together for sustainable growth and development of the Tata Group, an institution that we all cherish,” said Mr. Mistry.
