The ousted chairman of Tata group, Cyrus Pallonji Mistry, has been fighting the legal battle against Ratan Tata-led Tata group for the past three years. He lost the battle in the National Company Law Tribunal (NCLT) in July last year. But his perseverance has yielded a positive result as the National Company Law Appellate Tribunal (NCLAT) on Wednesday ordered to reinstate Mistry at the top post of the Tata group.
The NCLAT order termed Mistry's removal from Tata Sons and other companies illegal. "We are of the view that for better protection of interest of all stakeholders as also safeguarding the interest of minority group, in future at the time of appointment of the executive chairman, the Tata group should consult Shapoorji Pallonji group."
Tata group is expected to seek a stay on the NCLAT order in the Supreme Court.
After the order, Mistry released statement: "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." What does it mean? Does Mistry want to work as the chairman again?
The sources close to him say that he has retired from the dreams of going back to Bombay House, the headquarter of Tata group, as the chairman. "Mistry is a mature man, who fought for stitching up the wounded pride of his family. He wanted the family name to come clean and not be perceived as predators by the public," sources said.
"The outcome of the appeal is a vindication of my stand taken when the then board of Tata Sons, without warning or reason removed me, first as the executive chairman, and subsequently as a director of Tata Sons," Mistry said. As chairman, Mistry said, he had always tried to establish a culture that promoted effective board governance to create long-term stakeholder value, sustainable profits and growth.
Besides, the Shapoorji Pallonji family's 18.4 per cent stake in Tata Sons is their largest wealth. It is roughly valued at Rs 1-lakh crore. Converting Tata Sons into a private company from public limited was done with an intention to restrain the Mistry family from interfering in the group's decisions. The control of the inherited wealth going out of the family's hand has hurt Mistry's sentiments.
"Today's judgment is not a personal victory for me, but a victory for the principles of good governance and minority shareholder rights," he said. 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 added in the statement.
For the Tata Group to prosper as an institution, it is important that the management of individual companies, their boards, the management of Tata Sons, the board of Tata Sons and its shareholders, all work harmoniously within a robust governance framework, that in substance and form, protects the rights of all, including shareholders, investors and the Tata group employees, Mistry added.