The Shapoorji Pallonji (SP) Group, which holds 18% in Tata Sons, has moved the Supreme Court against the December 18 appellate tribunal order that reinstated scion Cyrus Mistry as the chairman of the Tata holding company. The group said the National Company Law Appellate Tribunal (NCLAT) had found the conduct of Tata Trusts, majority shareholder of Tata Sons, to be prejudicial, but failed to provide vital reliefs that would have put an end to the oppressive conduct of the majority stakeholder.
The group, in its appeal filed before the apex court, said the NCLAT had not granted proportionate representation on the board of Tata Sons to ensure SP’s interest and investment - now worth over £10 billion - were protected in future. The NCLAT order had allowed Cyrus to continue on the Tata Sons board until his tenure ends.
The SP Group said while abuse of power and conduct was found in the manner Cyrus was removed from the chairman’s post, his reinstatement in office was not sought. Instead, it had sought deletion of certain provisions in Tata Sons’ Articles of Association (AoA), which were tools for minority shareholder oppression. The group added that the NCLAT had erroneously said it did not have the powers to alter AoA even though it has correctly recorded that the relationship between the Tata Group and the Mistry family was of a quasi-partnership. The SP Group’s appeal comes nearly five weeks after the Supreme Court stayed the December 18 order.
The SP Group also said that the two enterprises have had a relationship since the 1920s when Cyrus Investments (formerly FE Dinshaw) arranged funds for Tata Sons. SP later increased its stake in Tata Sons by acquiring shares from the Tata family and today owns about 18% in the company. The relationship between Tatas and Mistrys had also spanned engagements in other areas, including the development of Sterling Theatre complex in Mumbai and sale of businesses to each other, including Special Steels and Forbes Gokak.
The SP Group said Cyrus’s father Pallonji Mistry and his two children served as directors on boards of 20 Tata companies. The senior Mistry was a member of the Tata Sons board from June 1980 to 2004. Cyrus took over his father’s position at Tata Sons in August 2006. He was removed from his directorship in February 2017 following a boardroom battle over differences in management objectives.
