Tribunal dismisses Cyrus Mistry's plea against Tata Sons

Cyrus Mistry

In a setback to Cyrus P. Mistry, the former chairman of Tata Sons, the National Company Law Tribunal (NCLT) today declined to grant a waiver from the eligibility condition to his two family-owned firms to move the forum against Tata Sons.

The National Company Law Tribunal (NCLT) on Monday dismissed the waiver application filed by Shapoorji Pallonji Group companies against Tata Sons.

The NCLT, by its order dated March 6, 2017, had held that the claims made by the Shapoorji Pallonji Group companies, espousing the case of Mr. Mistry, was not maintainable, as it did not meet the minimum shareholding threshold of 10% of issued share capital prescribed under Section 244 of the Companies Act, 2013.

Tata Sons had argued that if preference capital was also considered, the petitioner firms held only 2.17 per cent of the total issued share capital of Tata Sons. The order. represents a vindication of our position.

In its response, Tata Sons said Mistry failed to put into effect a strategy for managing a large and complex group such as the Tata group, as committed by him in the detailed note tendered by him to the selection committee on October 2010.

The suits, filed through two of his family firms, Cyrus Investments and Sterling Investment Corporation, had stated that the Shapoorji Pallonji group owns 18.37 per cent stake in Tata Sons.

On October 24 past year, Tata Sons' Board ousted Mistry as its Chairman and appointed Ratan Tata as Interim Chairman.

"We are pleased that Mistry's claims have been dismissed by NCLT".

Tatas interpreted the NCLT ruling as demonstration of the fact that the petitioners failed to make a convincing or compelling case that warranted a hearing on alleged mismanagement or oppression and hoped the verdict would bring a "vexatious campaign" to an end. Ltd. - against oppression of minority shareholders by the directors of Tata Sons.

Mistry was also voted off the company's board in February.Mistry had accused former Tata chairman Ratan Tata and his associates in Tata Trusts of interfering in the running of the various Tata group companies, launching legal proceedings in December.

The tribunal had earlier ruled that the petition was not maintainable but chose to hear the matter to decide if a waiver could be granted. "We trust that the NCLT's decision brings this matter to a close", he said.

Since the tribunal has dismissed the waiver petition of Mistry-owned investment companies, the original petition that sought relief as minority shareholders also got dismissed.

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