Tata vs Mistry: NCLAT restores Cyrus Mistry as chairman of Tata Sons

In a big setback to the Tata group, the National Company Law Appellate Tribunal (NCLAT) on Wednesday restored former Tata Sons chairman Cyrus Mistry as the chairman of the group. In October 2016, Mistry, the sixth chairman of Tata Sons, had been removed by the company’s board in a surprise move, and group patriarch Ratan Tata had been appointed the chairman.

The NCLAT also held the appointment of N Chandrasekaran, the current chairman of Tata Sons, as executive chairman as “illegal”. Chandrasekaran had been appointed the chairman of Tata Sons in February 2017. The appellate tribunal on Wednesday gave four weeks to implement its order.

A two-member NCLAT Bench headed by chairperson Justice S J Mukhopadhaya pronounced its judgement over the petitions moved by Mistry and the two investment firms challenging his removal from the group. The appellate tribunal had reserved its order in July this year, after completing its marathon hearing over the issue.

Soon after the appointment of Chandrasekaran in February 2017, Tata Sons had sought shareholders’ consent to convert itself as a private company in September 2018 which would have reduced the minority shareholders’ rights to sell their shares.

The Mistry family holds 18.5 per cent stake in the company. The conversion into a private company was also held “illegal”. Mistry had opposed the move and earlier moved the NCLT, which had dismissed his petition, ruling in favour of Tata Sons.

In August 2018, Mistry had accused Tata Sons of mismanagement and oppression of minority shareholders’ rights in the NCLAT by turning itself into a private company.

Tata Vs Mistry: A bitter courtroom battle

October 10, 2016: Tata Sons board sacks Cyrus Mistry as Chairman; Patriach Ratan Tata takes over as interim chairman. Mistry blames predecessor Tata for group’s dismal financial performance

February 20, 2017: TCS CEO, N Chandrasekaran takes over as Tata group Chairman

September 15th 2017: Tata Sons seeks shareholders consent to convert itself as private company; Mistry opposes the move

July 9, 2018: NCLT Mumbai dismisses Cyrus Mistry’s petition and ruled in favour of Tata Sons; Mistry accused Tata Sons of mismanagement and oppression of minority shareholders’ rights by turning private

August 3, 2018: Mistry moves NCLAT to appeal against NCLT order; seeks a seat on Tata Sons board