The National Company Law Tribunal (NCLT) on Monday dismissed a petition filed by Cyrus Mistry challenging his dismissal as chairman of Tata Sons.
“We have not found any merit in the petition,” the law tribunal said. “The management is more accountable to shareholders,” it said while ruling in favour of Ratan Tata.
Mistry was removed as the Tata Sons board and majority of its members lost confidence in him, the NCLT Mumbai’s main bench of B S V Prakash Kumar and V Nallasenapathy said in a judgement.
The NCLT’s judgement was based on a petition filed by Cyrus Mistry challenging his dismissal as chairman of the Tata Sons. The Board of Tata Sons had abruptly removed Mistry as its chairman on October 24, 2016 and sought his ouster from other group companies. He subsequently resigned from the board of six firms, but dragged Tata Sons and his then interim successor Ratan Tata to the NCLT.
The petition claimed that Mistry’s removal as chairman and subsequently as director of the board of Tata Sons was a result of oppression by promoters who are in-turn owned by Tata Trusts that owns over 68 per cent in Tata Sons. The second part of the petition focused on the alleged mismanagement by Tata Sons board and Ratan Tata which caused massive revenue loss for the group.
However, Tata Group had denied all the charges and said that Mistry was removed because the board had lost confidence in him. It further said that Mistry intentionally and in bad faith leaked sensitive and confidential information causing loss in Tata Group’s market value.
“He (Mistry) was appointed at the behest of Tata Trusts and his removal cannot be questioned by minority shareholders,” the Group’s counsel Abhishek Manu Singhvi had argued before the Tribunal.