Former Tata Sons chairman Cyrus Mistry on Wednesday said the National Company Law Appellate Tribunal (NCLAT) order that reinstated him as the head of the salt-to-software conglomerate was not a personal victory for him, but a victory for the principles of good governance and minority shareholder rights.
In a big win for Mistry , the NCLAT restored him as executive chairman of Tata Sons and ruled that appointment of N Chandrasekaran as the head of the holding company of salt-to-software conglomerate was illegal.
Mistry, a scion of wealthy Shapoorji Pallonji family, said the outcome of the appeal is a vindication of his stand taken when the then board of Tata Sons, without warning or reason removed him, first as the executive chairman, and subsequently as a director of Tata Sons.
In October 2016, Mistry was removed as Chairman of Tata Sons and he was the sixth chairman of Tata Sons and had taken over in 2012 after Ratan Tata. He was later also removed as a director on board of Tata Sons.
"For over fifty years, the Mistry family, as the significant minority shareholder of Tata Sons, has always endeavoured to play the role of a responsible guardian of an institution that the entire nation is proud of," he said.
Mistry, whose family owns 18.4 percent stake in Tata Sons, said, "My endeavour as executive chairman had always been to establish a culture and processes that promote effective board governance to create long term stakeholder value, sustainable profits and growth."
Calling management of individual companies, their boards, the management of Tata Sons, the board of Tata Sons and the shareholders of Tata Sons to work harmoniously within a robust governance framework, Mistry said all must protect the rights of all stakeholders, including shareholders, investors and the Tata Groups employees, who represent the strongest asset of the Group.
Further, he said, "I believe it is now time that all of us work together for sustainable growth and development of the Tata Group, an institution that we all cherish."
Tata family patriarch Ratan Tata and Mistry had reportedly fallen out over key investment decisions, including manufacturing of world's cheapest car Nano.
Mistry challenged his removal in the National Company Law Tribunal (NCLT). The case of oppression and mismanagement against Tata Sons and 20 others, including Ratan Tata, filed by Mistry family entities - Cyrus Investments and Sterling Investments - were however in March 2017 dismissed by the NCLT ruling that they were not eligible to pursue the allegations.
Section 244 of the Companies Act, 2013 allows a shareholder of a company to bring an oppression and mismanagement case against the firm if it holds not less than one-tenth of the issued share capital.
On appeal, the Cyrus Mistry firms had secured a partial win at the NCLAT, which waived the 10 percent shareholding requirement but remitted the matter to the NCLT.
In July last year, the NCLT rejected Mistry's petition to reinstate him and found no merit in his allegations of operational mismanagement and oppression of minority shareholders.
Mistry had approached the appellate tribunal against the verdict of Mumbai NCLT. The NCLAT had reserved its judgment after completion of arguments from both sides in July this year. The judgment was pronounced by a two-judge bench headed by Justice S J Mukhopadhyay on Wednesday.
