The National Company Law Tribunal on Monday dismissed Cyrus Mistry’s plea against his removal as the chairperson of Tata Sons, reported NDTV. Mistry has said he will appeal against the order of the tribunal.
The Mumbai bench of the NCLT ruled in favour of Tata Sons and said that the board of directors are competent to remove executive directors. Mistry was ousted because the board and its members had lost confidence in him, the bench said.
In his plea, Mistry claimed that his removal was illegal. He alleged mismanagement at Tata Sons, oppression of minority shareholders, a breakdown of corporate governance and excessive interference by Tata Trusts.
A statement from Mistry’s office described the tribunal order as “disappointing although not surprising”, reported PTI. “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 statement said.
Tata Sons welcomed the tribunal’s order, saying the judgement “vindicates the position of Tata Trusts and Tata Sons. “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,” said chairperson of Tata Sons N Chandrasekaran in a statement.
Mistry was ousted as the chairperson of Tata Sons in October 2016. Two months later, Mistry and his family-run investment firm, Cyrus Investments, approached the NCLT, as minority shareholders, against Tata Sons and others, including Ratan Tata.
On February 6, 2017 shareholders of Tata Sons had voted to remove Mistry from the post of director. Mistry had stepped down from all Tata Group companies in December 2016, alleging that Ratan Tata had staged “an illegal coup” the day he was sacked.
The holding company had accused Mistry of misleading the 2011 selection committee set up to appoint Ratan Tata’s successor. In January 2017, Natarajan Chandrasekaran was named the new chairperson of Tata Sons.