In a disappointing move for Cyrus Mistry, the National Company Law Tribunal (NCLT) upheld the October 24, 2016 decision of the Tata Sons Board of Directors dismissing him, the then Chairman. After the verdict, current Tata Sons Chairman N Chandrasekaran released as statement saying, “The judgement has only re-affirmed and vindicated that Tata Sons and its operating companies have always acted in a fair manner and in the best interest of its stakeholders. The Tata Group has always been committed and will continue to be committed to transparency and good corporate governance of global standards.”
He added, “Tata Sons hopes that a finality will be given to the judgement of NCLT, Mumbai by all concerned in the larger interest of companies, the shareholders and the public.” Mistry meanwhile, has termed the decision as “disappointing”, hinting that they would approach a higher tribunal. The Office of Cyrus Mistry said, “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.”
The NCLT ruled that the Tata Sons board of directors were 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 much-awaited verdict of NCLT Mumbai by a Special Bench comprising BS V Prakash Kumar and V Nallasenapathy came in a petition filed by Mistry after he was abruptly ousted as the Tata Sons Chairman, creating an upheaval in the Indian corporate world.
“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,” an official statement from Mistry's office said.
It added, “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.
Official sources said that Mistry is likely to challenge the NCLT verdict before the National Company Law Appellate Tribunal. They further contended that Mistry was sacked a Chairman 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.”