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Continuance of loss-making Nano example of mismanagement:

Press Trust of India  |  Mumbai 

of Cyrus Mistry, the of Sons, today told the NCLT here that the and the holding company's decision to grant concessions to acquaintances that resulted in major losses were prime examples of "mismanagement" at the group.

Two firms controlled by Cyrus Mistry's family have moved the Tribunal against the group, alleging oppression of minority shareholders and mismanagement.

C Aryam Sundaram, Mistry's lawyer, said the Tata group's practice of funding without proper risk assessment, particularly in the case of Nano, resulted in liabilities worth thousands of crores of rupees.

The fact that the project continued after Mistry's removal -- when the board of had unanimously decided to discontinue the production of the in early 2016 -- just for "emotional reasons" highlighted the mismanagement, he said.

"The continuation of the project and the reversal of the Tata Motor board's decision after Mistry's removal is a clear example of interference by the majority shareholders and the nominee trustees of Tata Sons," Sundaram argued.

Sundaram also alleged that extended undue favours and concessions to Chennai-based and founder C Sivasankaran. The Sivasankaran-owned Sterling was given shares in at a discounted price and several favours were extended to him at the behest of Ratan Tata, he said.

"The largesse given to Siva ranged from management contracts and shares being allotted at a huge discount," he said.

When decided to introduce a proposal to litigate against the to recover the Rs 694 crore it owed to Tata Sons, the latter's board agreed unanimously. However, at the very next board meeting, he (Mistry) was removed as the chairman, said.

is locked in a legal battle with the Tatas since his unceremonious exit as of -- the promoter company of the USD 105 billion group -- in October 2016.

and moved the NCLT against after Mistry's ouster, alleging oppression of minority shareholders and mismanagement.

has sought safeguards to protect the interests of minority shareholders.

While Sundaram will continue his arguments tomorrow, the Tatas are likely to put forth their plea from January 11.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, January 09 2018. 21:45 IST