Tata Sons, one of the country's biggest conglomerates, has suffered a setback with the National Company Law Appellate Tribunal (NCLAT) ordering the reinstatement of Cyrus Mistry as the chairman of the group. The company's board removed Mistry as the sixth chairman in October 2016 in a move that surprised India Inc. and appointed Ratan Tata as chairman.
Two investments
The NCLAT held the appointment of N Chandrasekaran, the current chairman of Tata Sons, as executive chairman as "illegal". Chandrasekaran was appointed the chairman of Tata Sons in February 2017. Tata Sons has four weeks to implement the order.
Mistry approached the NCLAT in August 2018 alleging mismanagement in Tata Sons and oppression of minority shareholders by turning itself into a private company.
A two-member NCLAT bench headed by chairperson SJ Mukhopadhaya allowed the petitions moved by Mistry and two investment firms challenging his removal from the group. The NCLAT reserved its order in July this year.
Tata Sons had sought shareholders' consent to convert itself as a private company in September 2018 soon after Chandrasekaran's appointment as executive chairman. The move would have reduced the minority shareholders' rights to sell their shares.
The Mistry family holds 18.5 per cent stake in the company, a report in the Business Standard says. The NCLAT has ruled that the conversion of Tata Sons into a private company was "illegal". Mistry, who had opposed the move, approached the National Company Law Tribunal (NCLT), which dismissed the petition. Mistry and others approached NCLTA against the NCLT ruling in favour of Tata Sons.
Mistry approached the NCLAT in August 2018 alleging mismanagement in Tata Sons and oppression of minority shareholders by turning itself into a private company.
Tata Group saga: A timeline of conflict and intrigue
October 10, 2016: Tata Sons board sacks Cyrus Mistry as Chairman; Patriarch Ratan Tata takes over as interim chairman. Mistry blames Tata for the group's dismal financial performance.
February 20, 2017: TCS CEO, N Chandrasekaran appointed Tata group Executive Chairman.
September 15, 2017: Tata Sons seeks shareholders' consent to convert the company into a private company; Mistry opposes the move.
July 9, 2018: The NCLT Mumbai dismisses Cyrus Mistry's petition and rules in favour of Tata Sons; Mistry accused Tata Sons of mismanagement and oppression of minority shareholders by turning private
August 3, 2018: Mistry appeals to the NCLAT against the NCLT order; seeks a seat on Tata Sons board
