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Indian tribunal orders reinstatement of Mistry as chairman of Tata Sons

December 18, 2019 at 02:16 pm EST

Cyrus Mistry, who has been embroiled in a legal battle with Tata Group since being ousted in 2016, won backing from a tribunal to be reinstated as executive chairman of its holding company, lawyers said on Wednesday.

Holding company Tata Sons has four weeks to file an appeal with India's top court over the ruling of the quasi-judicial National Company Law Appellate Tribunal (NCLAT), one of the lawyers representing the Tata Group said.

The ruling is a setback for the Tata group, one of India's largest and oldest conglomerates with interests stretching from technology and steel to automobiles.

Mistry, who had alleged shareholder oppression and mismanagement at the holding company, called the judgment "a victo
ry for the principles of good governance and minority shareholder rights".https://reut.rs/2PVIa1c

"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 in a statement.

Tata Sons said the company would take appropriate legal recourse. In a statement it also said that it has always operated in a "fair and equitable manner" and "acted in accordance with the law and will continue to do so".

Shares in group company Tata Motors fell 3%, Tata Global Beverages was down nearly 4% and Indian Hotels Company closed almost 3% lower.

In a letter to employees, Tata Sons' present chairman N Chandrasekaran, who was appointed in February 2017, urged everyone to stay focused on the business and the welfare of stakeholders.

Mistry had contested his removal as chairman, accusing the group of not following due process and alleged inappropriate interference in the company's affairs by family patriarch and the conglomerate's former chairman, Ratan Tata.

The NCLAT two-judge bench in its 172-page order sided with Mistry. It deemed the appointment of N Chandrasekaran illegal and asked Ratan Tata not to interfere with matters. The tribunal also ordered that Mistry be reinstated as director of Tata Group companies.

"It is a landmark ruling underlining the need for a board to be the effective institution for governing a company," said Somasekhar Sundaresan, an advocate representing Mistry.

The clash between Mistry and Ratan Tata has been one of the most high-profile and publicly fought corporate battles in India.

Mistry is a scion of the Shapoorji Pallonji family that holds a minority stake in Tata Group.

Tata Trusts, a group of public charities, owns a controlling 66% stake in holding company Tata Sons and is chaired by Ratan Tata.

By Aditi Shah

Stocks mentioned in the article

Add to a list Add to a list 0 selected To use this feature you must be a member Log in Sign up	Price	Change	5d. change	Capi.
THE INDIAN HOTELS COMPANY LIMITED	592.2 INR	-0.25%	-2.41%	10.09B
TATA CONSUMER PRODUCTS LIMITED	1,135 INR	-0.10%	-0.94%	12.94B
TATA CONSULTANCY SERVICES LTD.	3,846 INR	-0.42%	-3.80%	167B
AT HOME GROUP INC.	36.99 USD	-0.08%	+0.22%	2.41B
TATA MOTORS LIMITED	959.2 INR	-1.25%	-5.81%	42.54B

Ratan Naval Tata

Ratan Tata is at the head of Tata Group, a conglomerate of hundreds of subsidiaries among these Tata steel, the fourth largest steel company in the world, Tata Motors and Tata Telecom.

He graduated from Cornell University in New York; Ratan declined a proposal from IBM to join the Tata group. He began his career in steel branch of the group, where he stayed until 1971, where he was appointed Director of National Radio & Electronics Company (NELCO), company of the Tata group. In that period the company had met many difficulties, and then he bet on a new technology. In four years, the market share of Nelco rose to 20% from 2%, but this success will be very short.

In 1975 Indira Gandhi was Prime Minister, recession hit the country, the business suffered and social movements paralyzed Nelco’s production. The crisis will be strong as Nelco is forced to close.

In 1977 Ratan was in charge of the textile factory of the group, but the latter still using old technologies and suffered the competition of new factories. Ratan proposed to start a modernize process but the group didn’t give to him a financial support. In 1985, the factory closed.

In 1986 he was appointed chairman of Tata industries, before becoming in 1991 the CEO of Tata group. He began a restructuring process in order to draw seven areas of activity, in add he invited the old managers to leave the place in benefit to younger people.

In 2000 Tata bought Tetley Tea, English tea maker, this is the start of construction of the Tata empire.

In 2007, Tata acquired for $2.6 billion the anglo-dutch group Corus, specialist in steel and aluminium, and his group became the fourth largest steel producer in the world.

In March 2008, he bought two historic brands in the automobile sector, Land Rover and Jaguar for $2.3 billion, and he became the boss of 16000 UK employees. In late 2008, the automotive industry crisis brings down the manufactures’ profits nearly 30%, for this reason Tata decides to ask to Brown’s government to save Tata motors, and he requires a bill out of one billion dollars.

Tata group, it counts now 98 subsidiaries, 300 000 employees and 3.2% of Indian GFP.

In June 2011, the market capitalization of Tata group reached 4.32 trillion rupees, or $87 billion, and it is the first Indian group.

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Linked companies
Tata Teleservices Ltd. Tata Teleservices Ltd. Wireless TelecommunicationsCommunications Tata Teleservices Ltd. provides telecommunications services. It services include mobile services, wireless desktop phones, public booth telephony and wireline data services. The firm also provides Wi-Fi internet services, three-way conferencing and post-paid internet services. Tata Teleservices was founded by Ratan Naval Tata in 1996 and is headquartered in Mumbai, India.	Chairman
Sir Ratan Tata Trust	Chairman

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