Supreme court backs Tata Sons in removal of ousted chairman Cyrus Mistry
Siliguri, India: In a win for Tata Sons, the Indian Supreme court, Friday backed the $100 billion salt-to-software conglomerate in ousting the contested chairman of the group Cyrus Mistry who succeeded the iconic Ratan Tata in 2012.
Taking a favor for the Tata Sons group, the Supreme court headed by Chief Justice SA Bobde said the decision to sack Mistry was right and that "all questions of law are in favor of Tata Group," said the judges, NDTV reported.
The court dismissed the appeals filed by the Shapoorji Pallonji Group that said Tata's 2016 decision to remove Misty was a foul play, which the Tatas denied.
Chairman Ratan Tata, shortly after the Supreme verdict, said the SC verdict "reinforces the fairness and justice displayed by our judiciary."
Taking to Twitter, the industrialist wrote, "I appreciate and am grateful for the judgment passed by the honorable Supreme Court today."
What happened in the Ratan Tata vs Cyrus Mistry case?
In December 2019, the National Company Law Appellate Tribunal (NCLAT) issued an order to reinstate the chairman of the Tata Sons group -- who was ousted in a decision taken by the Board of Tata Sons in October 2016.
Mistry's family holds the largest minority stake of 18.5% stake in Tata Sons, amounting to ₹94,000 crores (or around $12.8 billion).
In December last year, the Shapoorji Pallonji (SP) Group accused the Tata Sons group of 'ambush' and 'blood sport' after it was decided to remove Mistry as the chairman of the group. Sp said the decision was a complete violation of the principles of corporate governance and Articles of Association.
But the claims were vehemently denied by the Tata Sons group arguing that it was in the rights inherited by the company that gives it the power to take such a decision.
Earlier, in January last year, the Supreme court stayed the NCLAT order by which Mistry was restored as the executive chairman of the conglomerate, granting relief to the Tatas.
The Tatas say it is open to buying Mistry's 18.5 percent stake as a part of its effort to end the dispute. The Supreme Court in its Friday verdict said both the Tatas and Mistry should take other legal routes to end the battle.
"We leave it to Tata Sons, Mistry to take legal route to resolve issue of shares. Value of Tata Sons shares depends on equity," the SC was quoted as saying.