Soon after the 3 pm order, Bombay House, the Tata headquarters in Mumbai, was a scene of gloom and uncertainty, according to an executive. About 20 minutes drive away, SP Centre, the office of Shapoorji Pallonji Group, was getting into a celebratory mood. “Today’s judgment is not a personal victory for me, but is a victory for the principles of good governance and minority shareholders’ rights,” Mistry said in a statement early evening. The $110-billion Tata group, busy working the phones and holding meetings with lawyers before challenging the order in the Supreme Court, took time to react. In a carefully worded statement, Shuva Mandal, general counsel, said Tatas were analysing the order. “It is not clear as to how the NCLAT order seeks to overrule the decisions taken by shareholders of Tata Sons and listed Tata operating firms at validly constituted shareholder meetings.’’
The group will take appropriate legal recourse, he said, while assuring stakeholders that it will continue to “operate in a fair and equitable manner’’. Earlier in the court, Abhishek Manu Singhvi, Tata Sons’counsel said, “all legal recourses will be taken.” The court has asked Ratan Tata
and the nominees of the Tata Trusts to desist from taking any decision in advance which requires majority resolution of the board of directors. Tata Trusts, which holds 66 per cent in Tata Sons, had played a critical role to remove Mistry as the group chairman in 2016.
In his order, Mukhopadhyay said, “For over 50 years, the Mistry family as the significant minority shareholder of Tata Sons, has always endeavoured to play the role of a responsible guardian of an institution the entire nation is proud of.” He added, “We further hold that the company’s affairs have been or are being conducted in a manner prejudicial and oppressive to Cyrus Mistry
and the interest of the company and group companies.
Corporate governance issues: The appellate tribunal also termed the conversion of Tata Sons Limited from being a public company to private as illegal and oppressive to the minority members and depositors. It asked the registrar of companies
to make the required correction.
Tata Sons had sought shareholders’ consent to convert itself to a private company in September 2018, impacting the minority shareholders’ rights to sell their shares.
NCLAT directed the Tata Group to protect interest of all stakeholders in future by consulting the minority shareholders Shapoorji Pallonji Group for appointment of executive chairman, independent directors and directors.
Tata Vs Mistry: A bitter courtroom battle
October 24, 2016:
Tata Sons board sacks Cyrus Mistry
as Chairman; Patriach Ratan Tata
takes over as interim chairman. Mistry blames predecessor Tata for group’s dismal financial performance
September 15th 2017: Tata Sons seeks shareholders consent to convert itself as private company; Mistry opposes the move
July 9, 2018: NCLT Mumbai dismisses Cyrus Mistry’s petition and ruled in favour of Tata Sons; Mistry accused Tata Sons of mismanagement and oppression of minority shareholders’ rights by turning private