After quitting, Cyrus Mistry opens legal front against Tatas

PTIUpdated: Thursday, May 30, 2019, 10:31 AM IST
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Mumbai: Ratcheting up his war against Tata Sons, ousted Chairman Cyrus Mistry on Tuesday moved the National Company Law Tribunal alleging oppression and mismanagement of minority interest, a charge the holding firm of the USD 103 billion group denied and said it will contest.

Mistry, who had on Monday quit from the board of six listed operating firms of the group ahead of shareholder voting on a resolution moved by Tata Sons seeking his removal, filed a petition before the NCLT alleging breakdown of governance, oppression and mismanagement of minority interest.

Following up his statement of taking his fight to a broader platform, Cyrus Investments Pvt Ltd and Sterling Investments Corp — two Shapoorji Pallonji Group entities — in the petition against trustees of Tata Trusts and directors of Tata Sons alleged abuse of articles of association by outsiders, breakdown of governance and loss of ethical value.

Also Read: Been served with petition filed before NCLT: Tata Sons

Citing sections 241 and 242 of the Companies Act, which deal with shareholder oppression and mismanagement, Mistry asked NCLT to “supersede the existing board of directors” of Tata Sons and appoint an administrator to look after its day-to-day affairs.

The petition sought appointment of a retired Supreme Court judge as the non-executive chairman and restrain interim Chairman Ratan Tata from attending board meetings and interfering in the affairs.

It also sought an investigation into role of Trustees of the Tata Trusts in operations of Tata Sons and the group companies and appointment of an independent auditor to conduct a forensic audit.

The petition also asked for restraining the search committee formed to look for Mistry’s replacement, from acting any further. It sought a new panel to be appointed and no candidate selected by the existing search committee be appointed without the quasi-judicial body’s approval.

Responding to the petition, Tata Sons said it will contest the allegations as it has “followed the highest standards of corporate governance in its operations”.

Also Read: Crucial week, in war between Tata Sons and Cyrus Mistry

It viewed “the Petition as an unfortunate outcome of the situation arising from Mr Mistry’s complete disregard of the ethos of the Tata Group and Jamsetji Tata”.

It further said: “Despite, Mr Mistry’s recent assertions that it is not a personal issue, it is evident that it always has been for him a personal issue which reflects his deep animosity towards Mr Ratan N Tata.”

The Tribunal has “the power to bring to an end the acts of oppression and mismanagement that have come to define the conduct of Respondent No. 2 (Ratan Tata), directors of Respondent No. 1 (Tata Sons)… the Trustee-Nominated directors and the Trustee,” the petition said.

The petition, however, excluded Tata Sons directors Ishaat Hussain, Farida Dara Khambata and Cyrus Pallonji.

‘Appoint SC judge as Tata Sons chairman’

Citing sections 241 and 242 of the Companies Act, which deal with shareholder oppression and mismanagement, Mistry asked NCLT to “supersede the existing board of directors” of Tata Sons and appoint an administrator to look after its day-to-day affairs. The petition sought appointment of a retired Supreme Court judge as the non-executive chairman and restrain interim Chairman Ratan Tata from attending board meetings and interfering in the affairs.

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