Mistry Vs Tatas: Law Tribunal Says 'Reputation Of Country' At Stake
Court demanded material proof from Mr Mistry to prove his charges Mr Mistry's family holds 18.3% stake in Tata Sons Final hearings would be held on January 31 and February 1, 2017
Mumbai: It was first day of the legal battle between Tata Sons and Cyrus Mistry before a bench of the National Company Law Tribunal in Mumbai. The bench refused to grant any relief to Cyrus Investments and Sterling Investments Corporation Pvt Ltd that had moved the Tribunal for an interim stay on Cyrus Mistry's removal as chairman of Tata Sons, the holding company of $100-billion conglomerate.
Hinting that the issue should be decided expeditiously, Justice BSV Prakash Kumar observed that "it is not just the reputation of the Tatas that is that stake but also the country".
Together, Cyrus Investments and Sterling Investments Corporation Pvt Ltd (SICPL) owned by Mr Mistry's family, hold an 18.3 per cent stake in Tata Sons. Tata Trusts, headed by interim chairman Ratan Tata, has a 66 per cent stake.
The court ordered that no new case will be filed in any court till it decides whether a case of oppression of Mr Mistry and mismanagement of Tata companies is made out against Tata Sons.
In a nearly two-hour long hearing that started at 10:30 am, arguing for Cyrus Investments, senior lawyer Aryama Sundaram accused Tata Sons of "misuse of articles that give enormous powers to majority shareholders". Any delay in deciding the case, he added, "will have a cascading effect on other companies".
Contesting Mr Mistry's removal, Mr Sundaram said, "He (Mr Mistry) was removed as chairman because he wanted to investigate acts of impropriety and misfeasance."
Mr Sundaram alleged "that oppression of minority shareholders (Cyrus Investments and SICPL) goes against the interests of the company". He also claimed that directors of Tata companies are not fulfilling their fiduciary responsibilities.
The bench observed that Cyrus Investments and Sterling Investments Corporation need to show material proof or evidence of misappropriation or laundering of funds against the Tatas.
Earlier this week, Mr Mistry in a surprise move had resigned from the boards of listed Tata entities and vowed to keep up the fight to improve governance norms in the nearly 150-year-old conglomerate.
Representing Tata Sons, senior lawyer Abhishek Manu Singhvi said that "the petition is not maintainable under law". Later, both sides agreed for a full and final hearing on January 31 and February 1, 2017.
