Appellate tribunal allows Cyrus Mistry to pursue his charges against Tata Sons
For him, it has waived the rule that shareholders must own at least 10% of a firm’s shares to be able to file a plea alleging mismanagement and oppression.
The National Company Law Appellate Tribunal on Thursday allowed ousted Tata Sons Chairperson Cyrus Mistry to pursue charges of oppression and mismanagement against the conglomerate, ANI reported. It has sent the case back to the National Company Law Tribunal.
For Mistry, the appellate tribunal has waived the condition that shareholders must own at least 10% of a firm’s shares to be able to file a petition alleging mismanagement and oppression. He was ousted as the Tata Sons chairperson on October 24.
Mistry’s two firms – Cyrus Investments and Sterling Investment Corp – together own 18.4% equity stake in Tata Sons, but they have less than 3% stake when only preference shares are taken into account. The firms had argued for a waiver of the eligibility criteria under the Under Section 241 of the Companies Act, 2013. However, the NCLT had denied the plea in April. The companies had moved the appellate tribunal after that.
The two firms had accused Tata Sons of bad practices, oppression and mismanagement. In the petition, they had urged the Mumbai court to direct the holding company not to remove Mistry from its board until the plea was disposed of. The NCLT had directed Mistry to submit documents to prove the allegations.
On February 6, shareholders of Tata Sons had voted to remove Mistry from the post of director. Mistry had stepped down from all Tata Group companies on December 19, alleging that Ratan Tata had staged “an illegal coup” the day he was sacked from his post, on October 24.
The holding company had accused Mistry of misleading the 2011 selection committee set up to appoint Ratan Tata’s successor. On January 12, Natarajan Chandrasekaran was named the new chairperson of Tata Sons.