Given the differences between the two shareholding groups, it would be against the interests of Tata Sons to have the Shapoorji Pallonji Group on the board, or associated with the company in any manner, senior counsel SN Mukherjee told the National Company Law Tribunal today.
Ousted Tata Sons Chairman Cyrus Mistry’s appointment was furthered by Tata Trusts and he was not nominated in his capacity as a representative of the Mistry firms, Mukherjee argued. He reiterated that the Mistry firms have no contractual or legal right to nominate a representative on the board of Tata Sons.
He was arguing on behalf of Ratan Tata before the Mumbai NCLT after the appellate tribunal granted the Mistry firms waiver from the 10 percent shareholding requirement to pursue oppression and mismanagement charges against Tata Sons. The matter has been heard extensively over more than two weeks.
The events following the removal of Mistry, including the allegations made by the Mistry firms against Ratan Tata have been detrimental to the Tata Group and eroded shareholder value, Mukherjee said. The relationship between Tata Trusts, which holds about 66 percent of Tata Sons’ stake, and Shapoorji Group, which holds approximately 18 percent, have broken to the point where they cannot co-exist, he informed the NCLT.
The Mistry firms will now be given a second chance before NCLT to rebut Tata’s arguments and establish their claim of oppression and mismanagement.