NCLT upholds Tata Sons 2016 move sacking Cyrus Mistry as Chairman
Mumbai, July 9 : In a significant ruling, the National Company Law Tribunal (NCLT) on Monday upheld the October 24, 2016 decision of the Tata Sons Board of Directors dismissing its then Chairman Cyrus Mistry, a company official said here, which Mistry's office termed as "disappointing".
The NCLT ruled that the Tata Sons board of directors was competent to remove the executive Chairman and that Mistry was ejected as the board members had lost confidence in him.
Rejecting Mistry's plea to reinstate him on the Board of Tata Sons, the NCLT pointed out that he (Mistry) had openly gone against the Board, and hence against the company.
"The ruling of the National Company Law Tribunal is disappointing although not surprising. We will continue to strive for ensuring good governance and protection of interests of minority shareholders and all stakeholders in Tata Sons from the wilful brute rule of the majority," office of Cyrus Mistry said in a statement.
The much-awaited verdict of NCLT Mumbai by a Special Bench comprising B. S. V. Prakash Kumar and V. Nallasenapathy came in a petition filed by Mistry after he was abruptly ousted as the Tata Sons Chairman that day (2016), creating an upheaval in the Indian corporate world.
Mistry later quit from the board of six other Tata Group companies but challenged the Group and his successor, the former Interim Chairman Ratan Tata's decisions, before the NCLT.
The petitioners, Cyrus Investments Pvt. Ltd and Sterling Investments Group of the Shapoorji Pallonji Group had filed the plea against the Tata Sons directors and trustees of Tata Trusts, alleging among other things, abuse of articles of association by outsiders, breakdown of governance and loss of ethical values.
"The ruling is in line with the earlier position expressed by the Tribunal. An appeal on merits will be pursued. Matters like TTSL, Air Asia, recovery of dues from Siva, non-closure of a loss-making Nano, a struggling resolution of Tata Steel Europe, all present serious issues that will be pursued. Not only the facts that were under consideration but also subsequent facts and developments that continue to evidence oppression and mismanagement will be under scrutiny and will be pursued in full earnest," the official statement from Mistry's office said.
"Ours has always been a principled fight to restore the Tata Group to its glorious days of high standards, best practices and most importantly, the best value systems. In this journey, no matter how hard it may seem, as shareholders who have always supported the Tata Group, it remains our duty to protect the Tata Group from those were destroying value and making the Group vulnerable to external forces," it added.
Official sources indicated on Monday that Mistry is likely to challenge the NCLT verdict before the National Company Law Appellate Tribunal, New Delhi.
They further contended that Mistry was sacked as Chairman and later as Tata Sons director as a result of "oppression by promoters who are in turn owned by Tata Trusts that owns over 68 per cent in Tata Sons".
The petition also listed how the Articles of Association were violated and misused "to give powers to the majority shareholders to subvert the interests of the minority shareholders and interests of the company."
Alleging massive revenue losses for the Group owing to the alleged mismanagement by Tata Sons board and Ratan Tata, the petition pointed to Ratan Tata's relationship with C. Sivasankaran and his companies, provided them aex-gratia favours' without there being any aquid pro quo' for the Tata shareholders or their group companies, and sought a forensic audit into such dealings.
Similar allegations were on the transactions with Mehli Mistry and Tata Power, resulting in an unjust enrichment of some entities and sought a forensic audit into these financial deals, and referring the findings to the Ministriy of Company Affairs' Serious Fraud Investigation Office (SFIO).
Accusing Tata Trusts trustees, Ratan Tata and Lord Kumar Bhattacharya of regularly reviewing the operations of various Tata Group companies though not being directors in any, the petition claimed violation of Insider Trading Rules by giving them access to price sensitive information.
A similar demand was made for forensic audit into the alleged fraudulent transactions of Rs.22 crore between Deloitte Haskins & Co, with Air Asia India with non-existent parties in India and Singapore.
Contending another example of oppression by Mistry, the petition claimed that during the course of the NCLT hearing, the Tata Sons board sought to convert it into a private company.
However, the NCLT dismissed all the allegations and rejected Mistry's plea to reinstate him on the Tata Sons Board.
Arguing for the Tata Group, its counsel Abhishek Manu Singhvi told the NCLT that Mistry was appointed at the behest of Tata Trusts and his removal cannot be questioned by minority shareholders and he was removed as per provisions of the law by seven out of nine directors in which Mistry did not vote for his removal and one director abstained.
Singhvi argued that Mistry was removed because the Tata Sons Board had lost confidence in him, as he had intentionally and in bad faith, "leaked sensitive and confidential information" which eroded Tata Group's market value.
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Inappropriate for MLAs seeking free IPL tickets, says D.K. Suresh
Bengaluru: Bengaluru Milk Union Ltd President D.K. Suresh on Monday said it is inappropriate for MLAs to seek free IPL tickets, adding that those interested in watching matches should pay for them personally.
Speaking to reporters near his residence in Sadashivanagar, he said, “IPL is a commercial tournament and does not represent the country. It is not right for public representatives to focus too much on such matters.”
Referring to the recent controversy during the RCB celebrations, he said, “let us find out who benefited the most from the statements made during the incident.” He also pointed out that BJP MLAs had received IPL tickets as well.
Responding to discussions about relocating the Chinnaswamy Stadium, Suresh said the government has already approved the construction of a new stadium at a location he had proposed.
“I had suggested building a stadium in Surya City and submitted a proposal for it. Bengaluru needs four stadiums in four directions to cater to its growing population and encourage youth participation in sports,” he said.
He noted that apart from Kanteerava Stadium, KSCA, and the Football Stadium, there are limited facilities in the city.
“When I was a Lok Sabha member, I had proposed allocating 100 acres in my constituency at Surya City. The land was later earmarked and the plan approved,” he added.
Suresh said he has discussed the project with Minister Zameer Ahmed Khan, Rajiv Gandhi Housing Corporation Chairman Shivalingegowda, and Anekal MLA Shivanna.
“The Cabinet has now approved the project, and a stadium will be developed on around 50–60 acres,” he said.
He further added that he has requested the Deputy Chief Minister to build another stadium at Shivarama Karanth Layout through the BDA, where 40 acres have been allocated. Plans are also being discussed to develop a well-equipped stadium in Bidadi.
Commending state government's recent bilingual policy move, Suresh said forcing children to learn three languages could affect their comprehension.
“It is a good decision to make two languages compulsory. Learning a third language should be left to the choice of students and parents,” he said.
Responding to criticism from BJP leaders, he said their tendency is to oppose every decision of the government.
“To please their central leadership, they take a pro-Hindi stance. Instead, they should advocate for the adoption of Kannada in all states,” he said.
When asked about the earlier three-language policy under Congress, he said, “the situation is different now. Today, the focus should be on quality learning. Kannada should remain the primary language, while students and parents can choose an additional language.”
