Following the move by Tata Sons, Tata Group patriarch Ratan Tata, Tata Trusts trustee Venu Srinivasan, and Tata Teleservices also went to the top court, appealing it to set aside the National Company Law Appellate Tribunal (NCLAT) order regarding power abuse and not taking decisions regarding the holding firm of the group.
The NCLAT order said Tata had abused his powers as Tata Trusts chairman and had ordered him and other Trust nominees not to take any decision regarding Tata Sons.
Tata said the NCLAT judgment of December 18 last year had castigated him, N A Soonawala (former trustee of Tata Trusts), and Nitin Nohria, a Trusts-nominated director, for “unfair abuse of powers”. Further, the NCLAT has ordered Tata and other nominees of the Tata Trusts to desist from taking any decision that requires majority approval by the board of directors or in the annual general meeting, said Tata in his petition. The findings of the NCLAT are wrong, erroneous, and contrary to the records of the case, and require consideration by the Supreme Court, said Tata in his petition.
The petitions by Tata and Tata Sons will be mentioned before the Chief Justice of India on Monday. The judge will decide on the hearing date and Bench. Asking the Supreme Court to set aside the NCLAT order, Tata Teleservices said the company was not party to the dispute either at the National Company Law Tribunal (NCLT) or at the NCLAT.
Yet the appellate tribunal order asked it to reinstate Cyrus Mistry, who had been removed as Tata Sons chairman in 2016, on the board.
The company has been denied an opportunity to defend the “justified, legitimate and lawful removal of Mistry”.
The petition filed by Tata Trusts also points out that Article 75 of Tata Sons’ Articles of Association is not per se oppressive, and was not even challenged in the company petition as originally filed but was done so only subsequently. The NCLAT has wrongly declared the conversion of Tata Sons from a public entity into a private one illegal, without even discussing or appreciating the previous Supreme Court judgment in a previous case, the Trusts said.
The feud between Mistry and Tata started after the former was sacked by the Tata Sons board in October 2016, citing “incompetence”. Subsequently, the Mistry family’s investment companies, which hold an 18.5 per cent stake in Tata Sons, moved the NCLT, Mumbai, appealing his dismissal, but lost the case. Later, the Mistry companies moved the NCLAT, which on December 18 last year ordered Tata Sons to reinstate Mistry as executive chairman.
Tata Trusts owns 66 per cent in Tata Sons, the holding company of the Tata group. The rest of the stake is owned by an assortment of small investors, including Tata group companies.
Tata said the NCLAT judgment was based on the wrong premise that Tata Sons was owned by just two groups. “There has never been any relationship akin to a partnership between the Mistry group and the Tatas. Cyrus Mistry was made the Executive Chairman of Tata Sons in a purely professional capacity and not as a representative of the SP Group,” he said.
Tata said Mistry was reluctant to disassociate himself from the SP family business, which was a condition of his appointment as chairman of Tata Sons. Mistry had concentrated power and authority in his own hands, which alienated several senior leaders within the group and group companies, Tata said.
After Mistry was removed, DoCoMo was paid its dues. “This is not what the Tata Sons brand stands for. Quite to the contrary, honouring its commitments is one of Tata Sons’ highest virtues it takes great pride in. The spat with DoCoMo brought ill-repute and reputational losses to Tata Sons,” Tata said.