Tata Sons Ltd’s ousted chairman Cyrus Mistry on Tuesday started legal action against the holding company of the $100-billion conglomerate, as the battle over his sacking shifted to the courtroom.
Mistry, through his investment firms Cyrus Investment Pvt Ltd and Sterling Investment Corporations Pvt Ltd, filed a petition in the National Company Law Tribunal against Tata Sons, interim chairman Ratan Tata and other directors. He filed the petition under Sections 241 and 242 of the Companies Act, which deal with oppression and mismanagement.
The tribunal is likely to hear the matter on 22 December, people familiar with the development said. Mistry and the Tatas have already roped in top legal experts and law firms to fight the battle.
The move came a day after he resigned from six listed Tata companies following a bitter public battle. Tata Sons had sacked Mistry on 24 October and named Ratan Tata, his predecessor, as the interim chairman. The company had been trying since then to remove Mistry from group firms. Mistry had initially refused to step down but hinted on Monday he would take legal recourse.
According to his petition, Tata Sons abused the articles of association and the governance framework to enable Ratan Tata to gain control of the company. The petition also names several directors on the board of Tata Sons and its majority shareholder Tata Trusts. These include Amit Chandra, Ishaat Hussain, Ajay Piramal, Venu Srinivasan, Nitin Nohria, Farida Khambatta, Ralf Spelth, N Chandrasekaran, NA Soonawala, RK Krishna Kumar and R Venkataraman.
The petition urged the tribunal to either replace the board of Tata Sons or appoint a retired Supreme Court judge as non-executive chairman, according to a copy of the petition seen by VCCircle. It also sought to restrain Tata Sons from issuing any new shares to dilute the stake held by the Mistry family, which owns about 18.5% of the company.
“Under Section 241 of the new Companies Act 2013, minority shareholders can approach the tribunal to seek relief where the majority is acting in a manner prejudicial to the interest. The clauses are mainly to get interim reliefs,†said Chandubhai Mehta, managing partner at law firm Dhruve Liladhar & Co.
Separately, Tata Sons said in a statement it is in consultation with its lawyers and will contest the allegations.
Tata Sons said it followed the highest standards of corporate governance in its operations and views Mistry’s petition as “an unfortunate outcome†of the situation arising from his “complete disregard of the ethos of the Tata Groupâ€.
“Despite, Mr. Mistry’s recent assertions that it is not a personal issue, it is evident that it always has been for him a personal issue which reflects his deep animosity towards Mr. Ratan N. Tata,†the statement said.
The company also said that it is surprising that Mistry is now making allegations on activities of Tata Sons after doing little to address them during his tenure as a director since 2006 and chairman since 2012. It added that Mistry “has not been able to graciously accept the decision†of the board.
Janak Dwarkadas, senior counsel representing Cyrus Mistry, refused to comment on the development. Phone calls and text messages to Somasekhar Sundaresan, another Mistry counsel, remained unanswered.
Raian Karanjawala, managing partner at Delhi-based law firm Karanjawala & Co, who is representing Tata Group, didn’t comment on the dispute saying only that he is yet to see the petition filed by Mistry.
Note:- This article has been updated to include details of the petition.
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