The National Company Law Appellate Tribunal (NCLAT) restored Cyrus Mistry as the Executive Chairman of Tata Sons, three years after he was removed as Chairman of Tata Sons. Here's a timeline of events that unfolded in the Cyrus Mistry-Tata Sons saga
Cyrus Mistry
The National Company Law Appellate Tribunal (NCLAT) on Wednesday ordered the reinstatement of Cyrus Mistry as chairman of the Tata Group. Mistry was removed from his post as chairman of the group’s holding company in 2016. We take a look at the developments of the three-year-old saga that began in October 2019 with the ouster of Cyrus Mistry as Chairman and subsequent appointment of Natarajan Chandrasekaran as the new head of the Tata Group.
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Cyrus Mistry, an Irish businessman of Indian origin, was appointed as the Chairman of the Tata Sons in 2012 following incumbent chairman Ratan Tata announced his retirement as head of the Tata Group. However, on October 24, 2016, Mistry was sacked from the position of Chairman of Tata Sons by the board members of the company, a decision that came as a shock to the corporate world because Cyrus Mistry was handpicked by his predecessor Ratan Tata to take over the Tata conglomerate .
Two months after his uncerimonious ouster from the Tata Group, two Mistry family backed investment firms, Cyrus Investments Pvt Ltd and Sterling Investments Corporation Pvt Ltd, moved the Mumbai bench of NCLT, alleging oppression of minority shareholders and mismanagement by Tata Sons and challenging Mistry's removal.
The following month, on January 12, 2017, Tata Sons named N Chandrashekaran as Chairman, the then TCS Chief Executive Officer and Managing Director after which on February 6, Mistry was also removed as a director on the board of Tata Sons, the holding company for the overall group.
As the Mistry family owns 18.4 per cent stake in the closely-held Tata Sons but the holding is less than 3 per cent if preferential shares are excluded, the NCLT Mumbai on March 6, 2017, set aside plea of two of their investment firms over maintainability issue. The plea that was set aside, and then rejected on April 17 citing that they did not meet the criteria under the Companies Act, where 10 per cent ownership is required for minority shareholders in a company in order to file a case of alleged oppression.
The investment firms on April 27, moved the NCLAT, challenging the NCLT order rejecting their petitions over maintainability. They also challenged rejection of their waiver plea.
Five months later, NCLAT allowed the pleas by Mistry’s investment firms on September 21 seeking waiver in filing case of oppression and mismanagement against Tata Sons. It, however, dismissed Mistry's other petition on maintainability saying the firms do not have more than 10 per cent in Tata Sons. The appellate tribunal also directed the NCLT to issue notice and proceed in the matter.
A week later on October 5, the investment firms approached the principal bench of NCLT at Delhi, seeking transfer of the matter from Mumbai to Delhi citing the likelihood of bias. The principal bench then reserved order on the plea of the firms. The next day, October 6, the Principal bench of NCLT dismissed the pleas and imposed a cost of Rs 10 lakh, which was to be shared by both firms.
Nine months later, the Mumbai bench of NCLT dismissed Mistry’s pleas challenging his removal as Tata Sons chairman as also the allegations of rampant misconduct on part of Ratan Tata and the company's Board, on July 6, 2018. NCLT said it found no merit in his allegations of mismanagement in Tata group firms.
The following month, on August 3 Mistry’s investment firms approached the NCLAT against the order of the NCLT dismissing his plea challenging his removal. Then ten months later on May 23, 2019, NCLAT reserved its order after completing the hearing in the matter.
Three months later on August 29, 2019, the NCLAT admitted the petition filed by Mistry in his personal capacity and decided to hear along with the main petitions filed by the investment firms.
In a big win, on December 18, the NCLAT restored Mistry as executive chairman of Tata Sons but suspended its implementation for four weeks in order to provide time for the company to appeal.
(With inputs from PTI)
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