The National Company Law Appellate Tribunal (NCLAT) held the sacking of Cyrus Mistry from Tata’s boardroom three years back as ‘illegal’ and ‘oppressive’ and restored him as the executive chairman of Tata Sons on Wednesday. The sixth chairman of Tata Sons, Cyrus Mistry was sacked after a resolution passed in the boardroom from the position in October 2016.
A special two-judge bench led by Justice S J Mukhopadhyaya said in the decision that the resolution passed by the Tata Sons board on October 2016 to remove Cyrus Mistry from his post and other actions taken in this direction was ‘illegal’.
‘The removal was not as per the Companies Act and that there was rampant mismanagement of affairs across Tata Sons group’, Cyrus Mistry had said in his plea.
The court’s verdict says that Mistry was ousted suddenly without giving any reason and in absence of any boardroom discussion. The National Company Law Appellate Tribunal also held the appointment of Natarajan Chandrasekaran as executive chairman ‘illegal’ after Mistry’s removal.
Cyrus Mistry comes from wealthy Shapoorji Pallonji family and holds Irish citizenship. With a stake of 18.4 per cent, this family has maximum shares in Tata Sons. Cyrus Mistry became the Chairman of the group in 2012 when Ratan Tata announced his retirement.
The boardroom disputes over investment decisions in Nano car is said reportedly the reason behind his removal from the post.
The tribunal’s verdict of Mistry’s restoration will come into effect after four weeks. The Tata group could file an appeal in these four weeks against the order. The group can also challenge the verdict in the apex court.