Cyrus Mistry’s actions hurt Tatas, SC told

Agency News

In its petition to the Supreme Court, Tata Sons, the holding company of the Tata group, has said the Mistry camp had at no point sought any prayer regarding the quashing of the appointment of present Tata group chairman, Mr. N Chandrasekaran, as the Executive Chairman of Tata Sons and yet, the NCLAT has declared his appointment as illegal. This NCLAT order, Tata Sons appeal says, needs to be reversed and set aside.

In its petition filed in the Supreme Court, Tata Sons said the NCLAT order needs to be set aside in view of the fact that former Tata Sons chairman, Mr. Cyrus Mistry's actions as a Director of Tata Sons were causing grave threat to the integrity of Tata Sons Board apart from causing prejudice to Tata Sons interests. The SC will hear the petition next week.

Tata Sons said several action taken by Mr. Mistry after his removal hurt its interests. 'This was clearly borne out from the extensive oral and written arguments rendered on behalf of Tata Sons before the NCLAT, pointing out that a purportedly confidential email addressed by Mr. Cyrus Mistry to Tata Sons Board of Directors was leaked, and confidential board minutes was put in public domain at the instance of Mr. Cyrus Mistry and he had unilaterally and in a wholly unauthorized manner corresponded with the income tax authorities (holding himself out to be a Principal Officer of Tata Sons) and submitted documents of Tata Sons to the income tax authorities. It was in view of these reckless and irresponsible acts that certain shareholders of Tata Sons had moved a requisition for the removal of Mr. Cyrus Mistry as the Director of Tata Sons,' the petition said.

Tata Sons said soon after Mr. Mistry was removed as Tata Sons Chairman in October 2016, an email written by Mr. Mistry to Tata Sons directors was leaked to the media.

'Without getting into the controversy as to who was responsible for leaking the email, the fact of the matter is that the email made several unfounded, false and personal allegations against Tata Sons directors. Allegations with respect to the business of Tata Sons, as also of the operating companies, were also made in the said email. This email found widespread media coverage and resultantly led to a lot of concern and enquiry by various stakeholders of Tata companies, apart from creating sudden and unexplained volatility in the share prices of the listed Tata companies,' the Tata petition said.

Stock exchanges and other regulators also sought details from Tata companies. 'It was felt necessary to bring a quietus to the chaos created by Mr. Mistry’s email dated 25 October 2016. It is for this reason that Tata Sons was constrained to issue the press statement in order to quell the uncertainty and provide comfort and an assurance of stability to various stakeholders of Tata Sons and the Tata companies. Unfortunately, the NCLAT judgment construes the press statement in an entirely bizarre fashion, Tata Sons said. It relies on the press statement to show that the decision to replace Mr. Mistry had a ‘global effect’, without making it clear as to what this purported ‘global effect’ had to do with the legality of the decision to replace him as the Executive Chairman, the petition said.