- Appointment of N Chandrasekaran to the post of Chairman was illegal: Appellate Tribunal
- Tata Sons gets 4 weeks to appeal against the verdict
- Mistry was removed as the chairman of Tata Sons in October 2016.
- The board of Tata Sons removed him due to lack of trust in Mistry.
- Mistry’s argument – This action was against the rules of the Companies Act
The National Company Law Appellate Tribunal (NCLAT) on Wednesday ruled in favor of Cyrus Mistry, saying that Mistry should be made the chairman of Tata Sons again, it was wrong to remove him. Mistry reached the Appellate Tribunal after losing the case to the National Company Law Tribunal (NCLT). The Appellate Tribunal also dismissed the appointment of N Chandrasekaran as the chairman of Tata Sons. Chandrasekaran became the chairman in January 2017. The Appellate Tribunal has directed Ratan Tata to stay away from Tata Sons’ board. Tata Sons sought 4 weeks to appeal against this decision. The Appellate Tribunal approved it. Tata Sons is a promoter of Tata group companies. Cyrus Mistry is the MD of Shapoorji Pallonji & Company. It is a firm associated with his family group, Shapoorji Pallonji. The Mistry family owns an 18.4% stake in Tata Sons.
In July 2018, the Company Law Tribunal rejected Mistry’s claim.
Cyrus Mistry was removed as the chairman of Tata Sons in October 2016. Two months later, two family investment companies – Cyrus Investment Pvt Ltd and Sterling Investment Corp – challenged on behalf of Mistry on the Mumbai Bench of the National Company Law Tribunal (NCLT). These companies argued that the decision to remove Mistry was not in accordance with the rules of the Companies Act. They had also alleged lapses in the management of Tata Sons and interference of Ratan Tata. But in July 2018, the Company Law Tribunal dismissed the claims. After this, Mistry himself appealed against the verdict.
Mistry became the chairman of Tata Sons in 2012
The Company Law Tribunal said in a July 9, 2018 decision that Tata Sons’ board was competent to remove Cyrus Mistry from the post of chairman. Mistry was removed because the company board and large shareholders did not trust him. Cyrus Mistry became the sixth chairman of Tata Sons after Ratan Tata retired in 2012.
Shares of Tata group companies fall by 4%
After the NCLAT decision, selling of shares of Tata group companies intensified. Tata Motors was down 3.05% at Rs 174.70 on the BSE. Tata Global Beverages closed at Rs 311.80 with a loss of 4.14%. Tata Power closed the business at Rs 55.50, down 0.98%.
Tata-Mistry controversy: what happened in 3 years?
24 October 2016 Cyrus Mistry removed as Chairman of Tata Sons, Ratan Tata appointed interim chairman.
25 October 2016 Mistry wrote a letter to the Tata Sons Board, accusing the management of the Tata Trust of interfering.
19 December 2016 Mistry resigned as director of all Tata group companies.
20 December 2016 Cyrus Mistry petitioned NCLT, accusing Tata Sons of mismanagement.
12 January 2017 N. Chandrasekaran was made the chairman of Tata Sons.
6 February 2017 Mistry was removed from the board of directors of Tata Sons.
21 September 2017 Board approves proposal to make Tata Sons a private company.
9 July 2018 NCLT rejects Cyrus Mistry’s petition.
3 August 2018 Mistry challenged the NCLT decision in NCLAT.
August 24, 2018 NCLAT told Tata Sons – do not force Mistry to sell shares.
18 December 2019 NCLAT orders restoration of Mistry, 4 weeks time for appeal to Tata Sons.