Mumbai: The National Company Law Tribunal on Monday dismissed Cyrus Mistry’s petition challenging his illegal removal as chairman of Tata Sons.
The Mumbai Bench of the NCLT ruled in favour of Tata Sons saying the board of directors are competent to remove executive directors. The tribunal did not find any merit in legacy issues raised by Cyrus Mistry against Tata Sons.
NCLT said Cyrus Mistry was removed because Tata Sons Board and its members lost confidence in him.
The tribunal said it was not accepting Mistry's contentions that his removal was due to the result of mismanagement by the board and oppression of minority shareholders of the group.
It added that, Mistry was removed because the board and majority of its members lost confidence in him after he sent out certain crucial information about the company to the I-T department, leaked details to the media and came out openly in public against the company's shareholders and its board, the bench said.
In his plea, Cyrus Mistry had said that his removal as chairman of Tata Sons was illegal. He had also alleged mismanagement at Tata Sons, oppression of minority shareholders, a breakdown of corporate governance and excessive interference by Tata Trusts.
The Tata Group had responded by saying that Cyrus Mistry's removal was not illegal and that he was familiar with the affairs of Tata Sons.
On October 24, 2016, the Board of Tata Sons had abruptly removed Cyrus Mistry as its chairman and sought his ouster from other group companies.
However, Cyrus Mistry resigned from the board, he dragged Tata Sons and his then interim successor Ratan Tata to the NCLT.
Cyrus Mistry’s petition claimed that his removal from the post of chairman and Director of Board of the company was a result of oppression by promoters who are owned by Tata Trust which has 68 per cent in Tata Sons.
Mistry can appeal against this order before the National Company Law Appellate Tribunal.
(With inputs from PTI)...