At a time when Indian industry is in the throes of an alarming slowdown with production in various sectors stagnating or declining and there is a severe crunch in terms of job avenues, the Delhi-based National Company Law Appellate Tribunal has compounded the problem by reinstating the sacked Executive Chairman of Tata Sons, Cyrus Mistry. Mistry had been shown the door for non-performance but the manner in which it was done has been found irregular by the tribunal. Considering the volatile global economic situation, this reinstatement, which will doubtlessly be challenged in the Supreme Court plunges that 150-year-old group into fresh difficulties. The appeal of Tata Sons will go through a tortuous process and each day’s uncertainty and delay will cost the group heavily. A virtual paralysis stares at the group through the process of appeal.
Mercifully, the new Chairman, N Chandrasekaran, has been performing well in his new role. The tribunal order will hit the operations of the group hard, especially because this spell of uncertainty has come at a crucial juncture in the international business environment. The tribunal can, however, hardly be blamed. The Tata Sons board apparently slipped up in not preparing a cast-iron case against Mistry for which the company is paying the price.
