It is a big win for Tata Sons in the legal battle against Cyrus Mistry. The Supreme Court in its judgment has allowed the appeal of Tata Sons and dismissed the plea filed by the Pallonji Group.
This means the NCLAT judgment of 2019, which had restored Cyrus Mistry as the executive chairman of the conglomerate, has been set aside.
The apex court has also said that it can't adjudicate on fair compensation to Pallonji Group for their shareholding. Both parties can decide between themselves under the provisions of Article 75 of the Articles of Association.
For context, the Pallonji Group has been in talks with lenders for a debt recast and has been pushing to sell its 18.37 percent stake in Tata Sons. Article 75 gives Tata Sons the right to first refusal.
To discuss the victory for Tata’s and what this means as far as the precedence for corporate governance standards for the country, CNBC-TV18 spoke to Shriram Subramanian, MD of InGovern; Ketan Dalal, MD of Katalyst Advisors; and Cherag Balsara, advocate at Bombay High Court.
They also spoke about the terms of the separation, the role of Article 75 and the various technicalities on that, and the options available for Tata Group to pay back the Mistry’s and relieve them of 18 percent shareholding in Tata Group.Watch this video for more.