Cyrus Mistry, who was dramatically sacked three years ago, on Wednesday won big when the National Company Law Appellate Tribunal (NCLAT) restored him as Executive Chairman of Tata Sons. The tribunal has also held the appointment of N Chandra as executive chairman illegal.
A two-judge bench of the NCLAT said Ratan Tata’s actions against Mistry were oppressive and the appointment of a new chairman was illegal.
The Tatas have been given four weeks’ time to file an appeal against the order. The tribunal said the restoration order will be operational only after four weeks. The Tatas also have the option of challenging the order in the Supreme Court.
WATCH | Cyrus Mistry wins case against Tata Sons, restored as Chairman by tribunal
The Mistry family is the single largest shareholder in Tata Sons, with an 18.4 per cent stake.
Mistry argued that his removal was not in violation of the Companies Act and that there was rampant mismanagement of affairs across Tata Sons.
“Today’s judgment isn’t a personal victory for me,but is a victory for the principles of good governance and minority shareholder rights. The outcome of the appeal is a vindication of my stand,” Mistry said in a statement on Wednesday.
The former top boss was ousted from the position in October 2016. He had taken over as the chairman in 2012 after Ratan Tata announced his retirement.
The National Company Law Tribunal (NCLT) had earlier dismissed petitions filed by two investment firms Cyrus Investments Pvt Ltd and Sterling Investments Corp challenging Mistry’ removal. There were also allegations of rampant misconduct on part of Ratan Tata and the company’s board.
A special bench of the tribunal had held that the board of directors at Tata Sons was “competent” to remove the executive chairperson of the company. The NCLT bench had also said that Mistry was ousted as chairman because the Tata Sons’ Board and its majority shareholders had “lost confidence in him”.
{{/usCountry}}A special bench of the tribunal had held that the board of directors at Tata Sons was “competent” to remove the executive chairperson of the company. The NCLT bench had also said that Mistry was ousted as chairman because the Tata Sons’ Board and its majority shareholders had “lost confidence in him”.
{{/usCountry}}Later, Mistry had approached the NCLAT against the NCLT order.