Ousted Tata Group Chairman Cyrus Mistry will continue his fight against Ratan Tata and the board of Tata Sons at the National Company Law Tribunal (NCLT), despite the appellate tribunal rejected his family firms’ appeal to stop Tata Sons shareholders’ meeting, which is scheduled for February 6, for removing him from its board. Mistry has started the legal battle for protecting his family’s business interest in Tata group— Shapoorji Pallonji Group holds 18.4 per cent stake in the holding company Tata Sons— rather than regaining the lost executive roles, said people in the know.
They said that his strong moves like Tata Steel UK sale, Nano scrapping plan and sale of loss making Hotels abroad would have shattered Ratan Tata and his men. “Mistry tried to streamline the businesses, exiting from weak assets, for the interest of shareholders. In addition, he raked up the corporate governance issues and fraudulent transactions. It eventually led to his ouster. Now he will fight it out legally,” a source said.
In a filing to the Tribunal, Mistry countered the allegation of Tata Sons that he was being ousted for poor performance of the group. In the response filed, he said that the market capitalization of Tata group increased by Rs 2,95,000 crore during Ratan Tata’s last seven years, while it rose by Rs 3,26,000 crore in his 3.5 years. Profit grew by 34.6 per cent and brand value rose by $5 billion. “All this has been achieved despite the significant legacy issues and a volatile global economy,” Mistry said in the filing, arguing that the cash flow to the Trusts significantly improved during his time on account of a special dividend.
The family firms – Cyrus Investments and Sterling Investments – argued at the appellate tribunal on Friday that Mistry’s removal was improper as National Company Law Tribunal in Mumbai on Dec 22 had asked both the parties to not take any action on the subject matter of the case. In the main petition, the family firms alleged oppression of minority shareholder rights and mismanagement at the Tata Group.
The board directorship in Tata Sons remains Mistry’s only position in the $103 billion conglomerate after he resigned from all the boards of companies on December 19. Mistry was removed as chairman on October 24 from Tata Sons after the board said it lost confidence in him.
[Source:-Â businesstoday]
