was procured by the trustees (an email often being sent to officials of Tata group firms without even copying to executive chairman) and thwarting of remedial action taken by Mistry to regulate sharing of information and adherence to need to know principles, warrant judicial notice by this court, it said.
According to it, the governance framework formulated was aimed at ensuring a legally compliant protocol for information sharing and not as an endorsement by the Mistry for interference of Ratan Tata and Soonawala in the affairs of Tata Sons
and Tata group of companies.
Business Standard reviewed the copy of the affidavit.
This price sensitive information was being repeatedly sought/demanded, from the management of Tata group of companies, even before the board has taken a decision on it, without execution of any engagement for legitimate purpose--is an approach Sebi has expressly rejected. It would also be contrary to the insider trading rules which require suitable safeguards to be put in place before information is shared by the controlling stockholders is being shared on a need-to-know basis, affidavit pointed out.
Mistry further said that it is the time the trustees are held accountable. “The breakdown of the governance is evident from the fact that when these trustees are called to account for their actions including in demanding pre-approval of matters and interfering in the operational matters, they (trustees) sought to deny any accountability by taking shelter under the “garb of rendering advice”. For doing so, one trustee (Ratan Tata) and another (Soonawala) claimed that he did so in a personal capacity and not as trustee--creating an element of role of ambiguity and prejudicing the interest of Tata Sons.
Therefore, these trustees need to be held accountable, as without even holding office , they seek to exercise power without accountability and responsibility.
The very future of Tata group lies in how the trustees govern the Tata Trusts, since the main trust property is the holding of shares in Tata Sons. The conferment of all decision-making power in one man or a high command among them, claiming to impose their views as being the views of trustees is “unethical, improper and a breach of trust,”.
It is critical that serious decisions of severe magnitude are not taken whimsically without much thought or for unstated collateral objectives. It is necessary to have a strong method of checks and balances in the trustees decisions, particularly if decisions they could take have a widespread impact on the Tata Group, affidavit said.
Mistry alleged that the reason provided by the Tatas for inexplicably and unceremoniously removal of him from the Tata sons was that trustees had lost confidence in Mistry is false.
In July 2016, Sir Dorabji Tata Trust and Sir Ratan Tata Trust together with the other allied trusts formed a committee of Trustees to deal with the matters relating to their shareholding in Tata Sons. This committee comprised only four Trustees including Ratan Tata, Soonawala and Tata’s former executive assistant R. Venkataraman.Therefore, to claim that all the Trustees of the various Tata Trusts
acted independently is false, Mistry’s argued.
While giving another instance of failed governance, Mistry raised procedures of the appointment of three new directors on the board of Tata Sons in August 2016, which he claims was the part of a wider scheme for ousting executive chairman, at the behest of Ratan Tata. It was alleged that their appointment was confirmed at the annual general meeting, where Ratan Tata held a proxy on behalf of the certain trustees and voted in favour of these directors.
“Tata group failed to produce any minutes of meeting, resolution passed by trustees to court as had such material been produced that would have been adverse to the trustees, '' affidavit said. It requested the apex court to issue appropriate order to regulate functioning of these trusts as they wield enormous power without any responsibility.
The apex court on May 29 began hearing on the case and asked all parties concerned to submit their replies within four weeks. The court will next likely hear the matter in July. However, the date has not been given yet.