In continuation to the legal tussle between the Tatas and Cyrus Mistry, it was disclosed to the National Company Law Tribunal that the reason for removal of Cyrus Mistry as the Company’s Chairperson was due to lack of confidence in him by its Board of Directors. The counsel for Tata Sons, Abhishek Manu Singhvire confirmed that the removal was solely a commercial decision with there being no personal interest in it of the company’s nominee trustee directors.
The counsel rebutted Mistry’s charge of not following due process for his removal. Singhvi clarified that as per requirements a single independent director, Ronen Sen and majority shareholders had given their approval for amending the agenda of the meeting to include his ouster. His removal was approved by majority of the trustee directors with seven directors voting for his ouster, one director refraining from voting and the ninth being Mistry himself.
Singhvi brought to NCLT’s notice about the board’s concern for the falling revenues of Tata Telecom and Tata Motors and Mistry’s habit of writing-off losses, which made nothing to revive the problematic performance of the group companies. Singhvi also had an answer to Mistry’s allegation of not being allowed to participate in meetings of Tata Sons’ Board in spite of being an 18% shareholder leading to minority shareholder’s oppression. He stated that Tata Sons was not a family-run company. There could be no vested claims for remaining a director by sole virtue of being a shareholder.
Singhvi further clarified that the ouster could not be called a deed of minority shareholder oppression and Mistry’s argument had no statutes in support. Mistry had claimed widespread mismanagement at Tata Sons, regular meddling of his predecessor Ratan Tata as well as by the other nominee trustees in the holding company and smaller listed entities. He called for introduction of some safeguards for protection of minority shareholders’ interests.
The legal tussle between the two is going on since Mistry’s ouster from the chairmanship of Tata Sons, holding company of the Tata Group in 2016.