'Prejudice to Mistry Group reason enough for NCLT

The lawyer of ousted Tata Sons chairman Cyrus Mistry today told the National Company Law Tribunal (NCLT) here that "prejudice" caused to the interests of the Mistry group by the Tata Trusts was reason enough for the tribunal to intervene in their dispute.
Aryama Sundram, who represents two Mistry family firms that have moved the NCLT against the Tata group, said there is a difference between "oppression" and "prejudice" as defined under the new Companies Act.
Under the new law, prejudice caused, or likely to be caused to any member of a company's minority shareholders is enough ground for the NCLT to intervene, the lawyer said.

Under the old Companies Act, there was no reference to "prejudice", and the tribunal had jurisdiction only if there was evidence of "oppression", which was more difficult to establish, he said.
Over the years, investor protection has become a major policy consideration, and prejudice to the Mistry group as investors (in Tata group) calls for protection from the Tata Trusts which own over 66 per cent stake in the country's largest corporate conglomerate, the lawyer said.
Mistry was removed as the chairman of Tata Sons without even a notice, and later as a director on the board when legal proceedings were pending. Now the holding company of Tata group (Tata Sons) is being converted into a private limited company to escape rigorous norms of governance applicable to public limited companies, the Mistry group's lawyer alleged.

Arguments are likely to continue next week.
Two Mistry family firms -- Cyrus Investments and Sterling Investments -- have moved the NCLT alleging oppression of minority shareholders and mismanagement at Tata group.
Mistry was sacked as chairman of Tata Sons on October 24, 2016, and removed as a board member on February 6, 2017.