The National Company Law Tribunal (NCLT) on Monday dismissed the plea by Cyrus Mistry, challenging his ouster as chairman of Tata sons.
The NCLT ruled the Tata Sons Board was competent to remove Mistry as chairman; the NCLT noted Mistry had gone against the board. The NCLT claimed it found no merit in Mistry's allegations.
Mistry was appointed as the sixth chairman of Tata Sons in 2012 after the retirement of Ratan Tata; he was ousted in October 2016. Mistry was initially groomed by Ratan, but they reportedly fell out over the years that the former was chairman. Mistry belongs to the Shapoorji Pallonji family, which holds a significant stake in Tata Sons.
Mistry filed a petition under the Companies Act that alleged his removal from the post of chairman of Tata Sons was a result of mismanagement by board trustees and called it “oppression” of minority shareholders.
Tata Sons responded to his petition, claiming the board had lost confidence in Mistry. The group also alleged Mistry had intentionally leaked classified information, causing a loss to the group's market value.
The Tata Group had argued that the law allowed for removal of a chairperson, which was adhered to in Mistry's case.
Tata Sons welcomed the tribunal's order. “The judgement has only re-affirmed and vindicated that Tata Sons and its operating companies have always acted in a fair manner and in the best interest of its stakeholders... Tata Sons hopes that a finality will be given to the judgement of NCLT, Mumbai by all concerned in the larger interest of companies, the shareholders and the public,” said N. Chandrasekaran, Chairman, Tata Sons.