Tata stocks mixed after NCLT throws out Cyrus Mistry's plea against Tata Sons
The bench said it found no merit in legacy issues raised by Cyrus Mistry.
By ETMarkets.com | Updated:
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Mistry had claimed that his removal as chairman and subsequently as director on the board Tata Sons was the result of oppression by the promoters, led by Tata Trusts.
NEW DELHI: Tata group shares traded mixed on Monday after the Mumbai bench of the National Company Law Tribunal (NCLT) dismissed former Tata Sons’ Chairman Cyrus Mistry's plea against the conglomerate and others.
Mistry, who had been removed as Tata Sons' Chairman on October 24, 2016, had alleged that Tata scion and former chairman Ratan Tata had acted as a shadow director and his conduct was prejudicial to the company.
The NCLT bench said the board of directors was competent to remove the Executive Chairman and said it did not agree with the charges over Ratan Tata’s conduct.
The bench also found no merit in the legacy issues raised by Mistry. The verdict came as a big disappointment for Mistry, who had earlier openly gone against the board of directors of Tata Sons.
Shares of Tata Motors traded 1.8 per cent higher on BSE while those of Tata Steel were up 1.05 per cent and that of Tata Power 1.6 per cent. TCS, the group's flagship, was trading 1.19 per cent lower at Rs 1,891.95 amid a rebound in the rupee and ahead of its June quarter earnings on Tuesday.
The NSE Tata Group index has dropped 23 per cent since October 24, 2016, compared with 19 per cent drop in the Nifty50.
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Mistry had claimed that his removal as chairman and subsequently as director on Tata Sons’ board was the result of oppression by the promoters, led by Tata Trusts. Besides, he had raised concerns over alleged mismanagement by the Tata Sons board and Ratan Tata. He had alleged that the mismanagement had cost the group loss of revenues.
This April, TCS became India’s first company to enter the $100 billion club in market capitalisation. Under new Group Chairman N Chandrasekaran, TCS has seen "enormous" growth over the years. In a message to shareholders, he told ETNow in April, “TCS will continue to prosper.”
Market analysts and observers say the Tata Group did not see any turnaround under Mistry, as was widely expected, and except for TCS and to some extent Tata Motors, almost all other businesses, including Tata Steel, actually went downhill during his tenure.
