Cyrus Mistry Fires First Legal Salvo At Tata Sons
A day after Cyrus Mistry stepped down from the Board of six listed Tata Group companies, investment firms run by his family have approached the National Company Law Tribunal.
Cyrus Investments Private Ltd. and Sterling Investment Corporation Ltd. are the two companies which hold Shapoorji Pallonji group's 18.4 percent stake in Tata Sons, and have filed a petition alleging mismanagement of Tata Sons under Section 241 and Section 242 of the Companies Act, 2013.
This section deals with oppression and mismanagement, with regard to any alteration in the Board of Directors of a company, leading to its affairs being conducted in such a manner that is prejudicial to its own or its members' interest.
Mistry was removed as the chairman of Tata Sons, on October 24, and has since accused the interim chairman Ratan Tata, and some Tata Trusts trustees of misgovernance at the Tata Group.
The National Company Law Tribunal has the power to remove or nullify any decision taken by board members if it finds merit in a petition filed under Section 241 of the Companies Act, 2013.
The first hearing of the tribunal is scheduled to take place on December 22, 2016.
On Monday, Mistry said his resignation was in the larger interest of shareholders and employees. However, he added that he would shift his campaign from the forum of extraordinary general meetings to a different, larger platform. He has done so within 24 hours of putting out that statement.
Acknowledging the receipt of the petition filed by the two investment trusts run by Cyrus Mistry’s family, Tata Sons has said that it is an “unfortunate outcome” of “Cyrus Mistry’s complete disregard of the ethos of the Tata Group and Jamsetji Tata,” who was the founder of the Tata Group.
Here is the full text of the statement put out by Tata Sons.