Win for Tata; no comeback for Mistry
Nevin John March 26, 2021
The Supreme Court ruling that blocked the reentry of Cyrus Mistry as chairman of Tata Sons is a big win for Ratan Tata. Besides, it will help Tata Group companies to continue implementing the transformation plan of Chairman N Chandrasekaran.
It was Tata's decision in 2016 that led to the unceremonious exit of Cyrus Mistry, whose family was holding 18.37 per cent stake in the holding company Tata Sons. "Tata had a feeling that the group is not going in the direction that he wished. The growing control of Mistrys in Tata group was another worry," said a veteran executive earlier.
Chandrasekaran was Tata's immediate choice. Since Chandrasekaran took over as chairman on February 21, 2017, Tata Group has been trying to resolve pending issues in group companies and pivot their businesses by leveraging technologies, including Artificial Intelligence (AI), data analytics and cloud computing.
Chandrasekaran has been implementing a strategy of simplification, synergy and scale. He grouped together similar businesses, formed 10 clusters and exited insignificant ones. Besides, he has been focused on balance sheet fitness and financial returns.
The Supreme court set aside National Company Law Appellate Tribunal's (NCLAT) order of December 17, 2019 which allowed reinstatement of Mistry as Chairman of Tata Sons. On January 10, 2020, the top court had stayed the judgment.
A bench comprising Chief Justice Bobde and including Justices AS Bopanna and V Ramasubramanian pronounced the judgment.