JOIN USTata Group being run by Ratan Tata, not a board: Cyrus Mistry’s counsel tells SC
The Tata Group was not professionally managed by a board but by Ratan Tata, the Chairman of Tata Trusts, through Trusts that appointed directors on Tata Sons board, Shapoorji Pallonji’s counsel CA Sundaram told the Supreme Court today.
"If they wanted to keep it a family affair, then they should have remained so instead of making it public,” Sundaram said. He added that Tata Sons manages many listed companies worth almost Rs 65 lakh crores and it should allow freedom to the group entities in making decisions.
The Shapoorji Pallonji (SP) Group, controlled by Cyrus Mistry, and the Tatas have been locked in a legal battle since 2016 after Mistry was removed as Chairman of Tata Sons. He was reinstated to the post by the National Company Law Appellate Tribunal (NCLAT) in December last year. The body also deemed the appointment of N Chandrasekaran as Mistry’s successor as illegal.
The Supreme Court is now hearing an appeal filed by the Tata Group against this decision of the NCLAT.
The SP group is the largest shareholder in Tata Sons, with an 18.4 per cent stake, while Tata Trusts, chaired by Ratan Tata, holds a 66 percent stake.
The counsel also said that the company cannot use the Articles of Association of Tata Sons to say that they have “absolute right over affairs of the company”. The Articles of Association have invited a lot of controversies because they state that Trust-nominated directors on Tata Sons’ board get veto powers, even if Trust’s stake reduces to 40 per cent.
The hearing will continue on December 15. Chief Justice of India Sharad Arvind Bobde is heading the bench in the Tata-Mistry case.