By SM.09 Jul, 2018
Cyrus Mistry"s petition against his removal as Tata Sons" chairman two years ago has no merit, the National Company Law Tribunal (NCLT) declared on Monday, dismissing his challenge.
The tribunal said the board of directors is competent to remove its executive directors and Mr Mistry was ejected "because a majority of the board members had lost confidence in him after he sent out certain crucial information to the Income Tax department, leaked details to the media and came out openly in public against the company"s shareholders and its board."
In response Mistry said that he was disappointed but not surprised with the NCLT verdict. "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... An appeal on merits will be pursued," read a statement released from Mistry"s office.
Mistry was sacked from the board of Tata Sons after a four-year stint in October 2016, and Ratan Tata was restored as the interim chairman.
In his petition, Mistry had called his removal illegal and had also alleged mismanagement at Tata Sons, oppression of minority shareholders, a breakdown of corporate governance and excessive interference by Tata Trusts.
The two judges of the tribunal did not find any merit in legacy issues raised by Mistry or in the argument that Ratan Tata had interfered.
Countering Mistry"s charges, the Tata Group had said that his removal was not illegal and that was familiar with the affairs of Tata Sons.
Mistry took over as the chairman of the salt-to-software group in 2012 after Ratan Tata announced his retirement.
Two months after his abrupt removal, Mistry and his family-run investment firm, Cyrus Investments, approached the corporate tribunal alleging "oppression" of minority shareholders. The Companies Act mandates that a petitioner should hold at least one-tenth of the issued share capital of a company or represent 10 percent of the total number of members to file cases alleging mismanagement.
Mistry can challenge today"s order before the National Company Law Appellate Tribunal.