NCLT dismisses Cyrus Mistry's waiver petition

MUMBAI: The National Company Law Tribunal refused to grant a waiver to Cyrus Mistry’s family firms on the minimum shareholding requirement to petition against Tata Sons, dashing the hopes of the Tata Group holding company’s former chairman who had alleged mismanagement and oppression of minority shareholder interests.

Under the Companies Act, a petitioner should hold at least one-tenth of the issued share capital of a company or represent 10% of the total number of members to take up such a case at NCLT to be eligible to seek legal recourse.

Tata Sons said it hopes that the NCLT decision brings the matter to a close.

“We hope this brings to an end a vexatious campaign against the company, the Tata Trusts and Ratan Tata,” said FN Subedar, chief operating officer of Tata Sons, in a statement. “Mistry has made many ill-advised and groundless allegations intended to besmirch the name of the Tata Group.”

A next possible legal step would be to approach the appellate tribunal. Mistry’s office hadn’t responded to queries about this at press time.

Mistry Cited Public Interest
The tribunal last month ruled that the Mistry family firms – Cyrus Investments Pvt Ltd and Sterling Investment Corporation Pvt Ltd — didn’t meet these requirements. Mistry was fighting to get this condition waived, citing public interest and the nature of the allegations.

Mistry’s family firms hold only 2.17% of the total share capital in the form of equity and preference shares of Tata Sons even though their equity shareholding stands at 18.4% in the holding company.

Tata Trusts, comprising charitable organisations controlled by Ratan Tata, hold a 66% stake while the remaining stakes are owned by Tata Group companies and some Tata family members, including Ratan Tata.

The two-member bench comprising judges BSV Prakash Kumar and V Nallasenapathy dismissed the 344-page main petition filed in December and the waiver petition filed last month. The order copy will be available on Friday.

Mistry was removed as chairman of Tata Sons in October last year after the board said it had lost confidence in his leadership. The unexpected ouster led to apublic spat between Mistry and the Tata Group in which both sides accused the other of poor corporate governance practices and business decisions.

In March, NCLT judges, in their order that disqualified the petition by former chairman’s firms on grounds of insufficient shareholding, wrote that the Tata Group was going through a harrowing time because of the boardroom battle but will make it through the turbulence.

Mistry, in the main petition, had requested the tribunal to supersede the existing board of Tata Sons and appoint an administrator to look after its day-to-day affairs until a new board is formed. It had also requested NCLT to bar Ratan Tata from attending the holding company’s board meetings.