Days after he lost his legal battle against the Tata Sons leading to his removal as chairperson of the conglomerate, businessman Cyrus Mistry on Tuesday said he was “disappointed” by the Supreme Court’s judgement, CNBC-TV18 reported.
“As a minority shareholder of Tata Sons, I am personally disappointed by the outcome of the judgement with respect to our case,” Mistry said in a statement released on Tuesday. “Although I will no longer be able to influence the direction of governance of the Tata group directly, I hope that the issues I have raised, will cause deeper reflection and influence individuals concerned to catalyze change. I sleep with a clear conscience.”
Last week, the Supreme Court set aside a December 2019 order of the National Company Law Appellate Tribunal that had reinstated Mistry as the chairperson of Tata Sons Limited. In a verdict that marked the end of a corporate battle spanning over four years since Mistry was ousted in 2017, the court dismissed all appeals filed on the matter by him and his minority stakeholder company Shapoorji Pallonji.
Reflecting back upon the four years since his removal, Mistry reiterated faith on the decisions taken by him to handle the “generational change in leadership” after he took over the reins of the company from Ratan Tata.
“In hindsight, while I may have had many imperfections, I have no doubt or erosion of conviction about the direction I chose, the integrity behind my actions and their consequences,” Mistry said, in his statement.
He added that his aim as the chairperson of Tata Sons was to ensure that decision making and governance in the company was “larger than any one individual”.
“It continues to be my belief that it is by such a model, that one would protect value for all stakeholders in Tata Sons and its various Group companies,” he stated. Notably, Mistry had alleged oppression of minority stakeholders and mismanagement in Tata Sons, in his appeal against the salt-to-software conglomerate.
Mistry-Tata Sons case
Mistry took over as Chairman of Tata Sons after Ratan Tata in December 2012 and was removed from the post on October 24, 2016, by the majority of the board of directors of the company, following a spell of disagreements. Then in February 2017, shareholders voted for the removal of Mistry from the board of Tata Sons.
Mistry then filed an appeal at the National Company Law Tribunal under Sections 241 and 244 of the Companies Act, 2013 alleging oppression of minority stakeholders and mismanagement in Tata Sons.
In July 2018, the NCLT dismissed Mistry’s petition holding that the board of directors are competent to remove the chairman and that no selection committee is required to remove the executive chairman. Mistry then challenged the NCLT decision to its appeal body, the National Company Law Appellate Tribunal.
On December 19, 2019, the NCLAT overturned the NCLT verdict and reinstated Mistry as the Tata Sons chairperson. It also held that the board meeting – where the decision to remove Mistry was taken – was illegal.
Tata Sons and Ratan Tata challenged the NCLAT decision in the Supreme Court in January 2020, following which the court stayed the NCLAT order. Mistry, meanwhile, filed a counter-appeal in the Supreme Court in February 2020, submitting that the NCLAT order had failed to secure Shapoorji Pallonji Group “from any prejudicial conduct in the future”.
After the hearing in the case – one of the most high-profile and long drawn legal battles in recent times in India’s corporate sector – concluded in December, the Supreme Court reserved its judgement.
Following the Supreme Court’s judgement on Friday, Ratan Tata had tweeted that the verdict was “a validation of the ethics” of the Tata Group.