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December 18, 2019

NCLAT Restores Cyrus Mistry As Tata Executive Chairman; Holds Chandra’s Appointment As Executive Chairman Illegal


By Bobby Anthony

nclat-restores-cyrus-mistry-as-tata-executive-chairman-holds-chandras-appointment-as-executive-chairman-illegal

The National Company Law Appellate Tribunal (NCLAT) has restored Cyrus Mistry as Executive Chairman of the Tata Group as well as held the appointment of N Chandra as Executive Chairman as illegal.

The NCLAT noted that there was 'prejudicial' behaviour from the Tata Sons board towards the minority shareholders. It also noted that the manner of removal of Mistry was hasty.

The NCLAT has also given clear directions to Ratan Tata to maintain arms distance as far as Tata Sons board is concerned.

The Registrar of Companies decision to change Tata Sons from public to private company has also been set aside.

The appellate tribunal, which has been hearing the case since 2018, had reserved its order in July 2019.

It may be recalled that Cyrus Mistry, who was appointed as the sixth chairman of the Tata Group between 2012 and 2016, was ousted after a boardroom coup on October 24, 2016.

Later, on December 20, 2016, Mistry — through two family-run firms — Cyrus Investments and Sterling Investments Corp — had moved the National Company Law Tribunal (NCLT) in Mumbai against Tata Sons and others for oppression as well as mismanagement.

Mistry had accused Tata Sons which is the holding company of all Tata Group firms, of governance issues due to intervention by Tata Trusts Chairman Ratan Tata.

He had also accused the Tata Group of mismanagement and oppression of minority shareholders’ rights, apart from challenging his removal.

On February 20, 2017, N Chandrasekaran, who used to Tata Consultancy Services (TCS), took charge as Chairman of Tata Sons.

On July 9, 2018, the NCLT had dismissed Cyrus Mistry’s petition and ruled in favor of Tata Sons.

NCLT’s Mumbai special bench had dismissed Cyrus Mistry's petition “without cost”. The NCLT had also stated that a company’s board was competent enough to remove the chairman, adding that Mistry was ousted as the board of Tata Sons had lost confidence in him.



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