NE NEWS SERVICE
MUMBAI, DEC 19
The National Company Law Appellate Tribunal (NCLAT) has ordered the restoration of Cyrus Mistry as the Executive Chairman of Tata Sons on Wednesday. The NCLAT also held the appointment of N Chandrasekaran as the Executive Chairman of the group as illegal.
The tribunal, however, added that the order of restoration of Mistry is going to be operational after four weeks. The period will allow the Tata group to file for an appeal against NCLAT’s latest decision.
Hours after the NCLAT’s decision, Mistry in a statement that the outcome of his appeal is a vindication of his stand. “Today’s judgment isn’t a personal victory for me, but is a victory for the principles of good governance and minority shareholder rights. The outcome of the appeal is a vindication of my stand,” he was quoted in a statement by PTI.
Earlier this year in January, Cyrus Investments – is the investment firm of Shapoorji Pallonji (SP) Group, had contended to the tribunal that Cyrus Mistry was removed as the chairman of Tata Sons against the company’s Articles of Association (AoA).
Cyrus Investments had also urged for the modification in Tata Sons’ AoA, particularly Article 75, which empowers it to ask minority shareholders to transfer their shares.
The SP Group had also earlier requested the NCLAT to order amending Article 121 of the Tata Group’s Articles of Association, alleging that the article was helping Dorabji Tata Trust and Ratan Tata Trust, part of the Tata Trust, to govern the whole Group even as they are the minority shareholders.
Tatas to challenge NCLAT order in SC
Tata Sons will likely be able to challenge the National Company Law Appellate Tribunal’s order reinstating Cyrus Mistry as executive chairman of Tata Sons on several grounds, several lawyers said.
The Tata group is expected to take all legal recourses, including moving the Supreme Court.
Legal recourses, including interim relief before the Supreme Court, are likely to be fully activated before 18 January, according to lawyers—the outside limit of the four-week deadline given by the tribunal to appeal against the order.
Lawyers said the group may appeal before the Supreme Court at the earliest to secure an injunction against the NCLAT order from taking effect, and to ensure an early hearing.
Tata Sons strongly believes in the strength of its case
According to a Tata Sons’ statement Tata Sons has received and is analysing the order of the National Company Law Appellate Tribunal (NCLAT). It is not clear as to how the NCLAT Order seeks to over-rule the decisions taken by shareholders of Tata Sons and listed Tata operating companiesat validly constituted shareholder meetings. The NCLAT 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.
Tata Sons assures its various stakeholders that it not only has always operated in a fair and equitable manner but also acted in accordance with the law and will continue to do so.
