A day after resigning from the boards of six listed Tata firms, ousted Tata Sons Chairman Cyrus Mistry today moved the National Company Law Tribunal alleging oppression and mismanagement of minority interest, a charge the holding firm of the USD 103 billion group denied and said it will contest.
Mistry, who had yesterday quit from the board of six listed operating firms of the group ahead of shareholder voting on a resolution moved by Tata Sons seeking his removal, filed a petition before the NCLT alleging breakdown of governance, oppression and mismanagement of minority interest.
Yesterday, Mistry had vowed to take his fight to a broader platform.
Cyrus Investments Pvt Ltd and Sterling Investments Corp — two Shapoorji Pallonji Group entities — in the petition against trustees of Tata Trusts and directors of Tata Sons alleged abuse of articles of association by outsiders, breakdown of governance and loss of ethical value.
Citing sections 241 and 242 of the Companies Act, which deal with shareholder oppression and mismanagement, Mistry asked NCLT to “supersede the existing board of directors” of Tata Sons and appoint an administrator to look after its day- to-day affairs.
The petition sought appointment of a retired Supreme Court judge as the non-executive chairman and restrain interim Chairman Ratan Tata from attending board meetings and interfering in the affairs.
It also sought an investigation into role of Trustees of the Tata Trusts in operations of Tata Sons and the group companies and appointment of an independent auditor to conduct a forensic audit.
The petition also asked for restraining the search committee formed to look for Mistry’s replacement, from acting any further. It sought a new panel to be appointed and no candidate selected by the existing search committee be appointed without the quasi-judicial body’s approval.
Responding to the petition, Tata Sons said it will contest the allegations as it has “followed the highest standards of corporate governance in its operations”.
It viewed “the Petition as an unfortunate outcome of the situation arising from Mr Mistry’s complete disregard of the ethos of the Tata Group and Jamsetji Tata”.
It further said: “Despite, Mr Mistry’s recent assertions that it is not a personal issue, it is evident that it always has been for him a personal issue which reflects his deep animosity towards Mr Ratan N Tata.”
The company alleged that Mistry was the Chairman of Tata Sons for almost four years and it was surprising that he is now making allegations on activities of Tata Sons “after doing little to address them, in his tenure both as a Director (since 2006) and a Chairman since 2012”.
“Mr. Mistry’s removal as Chairman from the Board of Tata Sons Ltd was approved by an overwhelming majority of the Directors and it is unfortunate that Mr Mistry has not been able to graciously accept the decision of the very same Board that appointed him,” the statement said.
The Tribunal has “the power to bring to an end the acts of oppression and mismanagement that have come to define the conduct of Respondent No. 2 (Ratan Tata), directors of Respondent No. 1 (Tata Sons)… The Trustee-Nominated directors and the Trustee,” the petition said.
The petition, however, excluded Tata Sons directors Ishaat Hussain, Farida Dara Khambata and Cyrus Pallonji.
It alleged that Mistry was removed as Executive Chairman of Tata Sons without any notice and without any explanation at the behest of Ratan Tata.
It also alleged that specific independent director of some listed companies like Nusli Wadia, who acted independently and endorsed the good performance of the management, were “threatened” with oppressive action.
The first hearing by NCLT on the petition is reportedly slated for December 22.
Earlier, Mistry had ruled out chances of a truce with Ratan Tata, claiming his fight is for larger issue of governance and that he will slug it out without giving up his family’s 18.5 per cent holding in the USD 103-billion conglomerate.
“I will fight for that. I have fought for that… We have been there for 50 years, its not one day or two days,” Mistry said in an interview today.
“This is not about a business group fight. It is not about those type of things. If that was the situation, I would like to sit in the position. That’s why I have removed myself from the position, because it is not me looking for position or power,” Mistry told PTI in an interview.
He replied in negative when asked specifically if his family will exit its ownership in Tata Sons, the holding company of the country’s biggest conglomerate, if he loses his fight in the courts.
Mistry family’s 18.4 per cent holding in Tata Sons is valued at close to Rs 1 trillion and is the single largest non-promoter group investor for over five decades.
While resigning from the boards of the Tata group firms yesterday, Mistry had launched a scathing broadside against Ratan Tata and vowed to shift his fight to a “larger platform”.
“Having deeply reflected on where we are in this movement for cleaning up governance and regaining lost ethical ground, I think it is time to shift gears, up the momentum, and be more incisive in securing the best interests of the Tata Group,” Mistry had said.
He further said that with this thought in mind, he “decided to shift this campaign to a larger platform and also one where rule of law and equity is upheld”.
Mistry, who had continued to be on boards of operating companies even after his ouster as chairman of the holding company Tata Sons on October 24, had again raked up “breakdown of governance” and questionable dealings including release of more funds to airline venture Air Asia under interim chairman Ratan Tata despite “findings of fraud and wrong-doing”.
His resignation came ahead of five Tata companies — Indian Hotels, Tata Steel, Tata Motors, Tata Power and Tata Chemicals — calling extraordinary general meetings starting from today to oust him as a director on company boards after Ratan Tata, a scion of the conglomerate’s founding family, replaced him as chairman of the group’s holding company.
(With PTI inputs)
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