In a big victory for Tata Sons, the Supreme Court on Friday overturned the National Company Law Appellate Tribunal’s December 18, 2019 order reinstating Cyrus Mistry as the Group’s chairman, putting an end to a four-year feud between the two. The Supreme Court had previously stayed the appellate tribunal’s order in its entirety on January 10. On October 24, 2016, Mistry was removed as chairman and as a divisive figure.
The Shapoorji Pallonji Company, which owns an 18.3 per cent interest in Tata Sons and claims a value of Rs 1.75 lakh crore, has been dealt another blow by the apex court, which said it was up to the two parties to reach an understanding on the valuation and terms of the stake sale. The Tatas and the SP Party have a nearly seven-decade relationship, with Ratan Tata endorsing Cyrus Mistry’s nomination.
The bench, light-emitting diode by justice reserves Bobde, determined “it is an understatement that the same person (Mistry), WHO represents shareholders owning simply eighteen.37% of the overall paid share capital and however known because the successor to the empire, has chosen to accuse the same Board, of conduct, oppressive and below the belt detrimental to the interests of the minorities”.
The Supreme Court on Friday reversed a December 18, 2019 decision by the National Corporate Law Appellate Tribunal, which had reinstated Mistry as chairman of Tata Sons after finding his dismissal in October 2016 “illegal.”
A thin line distinguishes a well-thought-out strategy from one that has been premeditated, and this line can sometimes be blurred… In reality, the position of Executive Chairman is oneIt alleged that Mistry’s subsequent actions, including leaking his emails to the press in October 2016 while still serving as a director, justified his removal from Tata Sons and other group companies’ board of directors.
The Mystery-run family firms had also demanded proportionate representation on the Tata Sons board, arguing that the SP Group owns 18.37 per cent of Tata Sons’ equity share capital and has a stake worth over 1.75 lakh crore, making it the single largest non-Tata shareholder.
The Tata group, which priced the Shapoorji Pallonji Group’s 18.4 per cent stake at anywhere between Rs 70,000 and Rs 80,000 crore, had offered to buy out the minority stake at fair market value by Article 75. Tata Sons had also turned down the SP group’s offer of a non-cash settlement in exchange for its interest in the holding company.