Mistry moves tribunal against Tata Sons; company says it shows ‘deep animosity’
According to sources, Mistry’s family-controlled investment firms today moved the National Company Law Tribunal (NCLT) in Mumbai against Tata Sons.Updated: Dec 21, 2016 01:12 IST
A day after resigning from the boards of six listed Tata firms, Cyrus Mistry took the legal route in his fight against the Tatas by filing suit in National Company Law Tribunal against Tata Sons on Tuesday, alleging oppression and mismanagement of minority interest.
Mistry, who had on Monday 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.
Following up his statement of taking 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.
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”.
“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,” says the statement.
While resigning from the boards of the Tata group firms on Monday, 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”.