A new twist has emerged in the battle between Tata patriarch Ratan Tata and the group's only ousted chairman Cyrus Mistry. The Supreme Court has admitted Mistry's appeal, who sought representation for his family on the board of Tata Sons. It is not a good news for Tata as the board representation was never an argument point in National Company Law Tribunal (NCLT) and the appellate tribunal (NCLAT).
The new plea will be heard along with the appeal of Tata Sons, which challenged the NCLAT order that asked the 150-year old group to reinstate Mistry as chairman. The apex court had stayed the appellate tribunal order in January. Mistry's new appeal is also against the NCLAT order, which hasn't offered any judicial protection to the minority shareholder rights of Mistry family, which holds 18.37 per cent stake in Tata Sons, the holding company of Tata group companies.
Mistrys are the second largest shareholder in the holding company after Tata Trusts.
The apex court's final order in the matter will be important as the dispute has now boiled down to two key issues --a board position for the minority shareholder Shapoorji Pallonji group and turning back Tata Sons into a public limited company from private.
Cyrus Mistry wants to restore the rights of his family, which they held before 2011-12. The young Mistry was the director on the board before becoming the chairman of the group. Before him, his father Pallonji Mistry represented the family on the board. Cyrus wants Tata Sons to turn back into a public limited company. The board position will help them be involved in the decision-making process of Tata group.
A three-judge bench comprising Chief Justice SA Bobde and Justices BR Gavai and Surya Kant will hear the appeals. Eminent lawyers like Abhishek Singhvi, Rajiv Nayyar, Harish Salve, Amit Sibal and Mohan Parasaran are expected to appear for Tata. Mistry is likely to continue with the same team, which fought the case in NCLAT, including Aryama Sundaram, Arun Kathpalia and KG Raghavan.
"Mistry wants to protect his family's shareholding in Tata Sons, while Tata targets to block the re-entry of Mistry in the group in any roles. It is with this intention Tata Sons had been turned into a private company from public," say sources.
If the Supreme Court grants a director post to Mistrys, in all likelihood, Cyrus will take up the role rather than sending any representative. Mistry earlier said that his fight is not for the executive chairmanship of Tata Sons or the directorship in any Tata companies. "I will however vigorously pursue all options to protect our rights as a minority shareholder, including that of resuming the thirty year history of a seat at the board of Tata Sons and the incorporation of the highest standards of corporate governance and transparency at Tata Sons," he said.
The 82-year-old industrialist Ratan Tata wanted a complete reversal of NCLAT order. The order found Tata guilty of taking "oppressive and prejudicial steps" against Mistry. Strongly criticising the appellate tribunal judgement, Tata alleged that the court has propagated a selective narrative by glossing over the record.