The National Company Law Appellate Tribunal has restored Cyrus Mistry as the executive chairman of the Tata Group. This judgement renders N Chandrasekaran's appointment as executive chairman of the company illegal. However, the appellate tribunal has granted Tata Group four weeks to file an appeal against its judgement. The restoration order will only be operational after that this time period
Cyrus Mistry has been engaged in a bitter legal battle with Tata Sons since his ouster from the board back in October 2016. Mistry, a member of the Shapoorji Pallonji family, had become the sixth executive chairman of Tata Sons after group's patriarch Ratan Tata hung his boots. Presently, Ratan Tata is the Chairman Emeritus of Tata group and heads the trusts that hold a majority stake in Tata Sons. The Shapoorji Pallonji family owns 18.4 per cent stake in the group.
Two months after his removal, Mistry's family-run firms Cyrus Investments Pvt Ltd and Sterling Investments Corp approached the National Company Law Tribunal as minority shareholders, against Tata Sons, Ratan Tata, and some other board members.
Mistry in his pleas had primarily argued that his removal was not in accordance with the Companies Act. He had also alleged that there was rampant mismanagement of affairs across Tata Sons and interests of minority shareholders were being oppressed.
He also alleged that Tata Trust chairperson Ratan Tata and trustee N Soonawala interfered with the day-to-day operations of the group companies, they acted as shadow directors, and all of the above caused massive revenue loss for the group. Tatas had refuted the allegations.
The NCLT had dismissed Mistry's pleas citing that such cases filed by investors can be entertained only after a minimum shareholding condition is fulfilled. The company law tribunal had ruled that Mistry's family firms do not meet the shareholding norms and refused his request for a waiver.
Mistry had moved NCLAT against this decision via his investment firms Cyrus Investment and Sterling Investment. NCLAT had admitted Mistry's appeal in August 2018, stipulating that Mistry could not be "forced to sell" his shares in Tata Group while his appeal was pending with the appellate tribunal.