Reinstatement of erstwhile Tata Group chairman Cyrus Mistry as chairman of Tata Sons has been stayed by the Supreme Court (SC) on January 10, 2020. The National Company Law Appellate Tribunal (NCLAT) had ordered Mistry’s reinstatement and restoration of his directorships in the holding company and three Group companies on December 18, 2019. The Tata Group had petitioned the Court against NCLAT’s order which had also set aside Tata Sons’ decision to convert itself into a private limited company. The SC stated that the case would be listed for hearing after all sides had formally placed their submissions, noted The Economic Times (ET) of January 11, 2020.
Opposing the stay on NCLAT’s order, Mistry’s lawyer C. A. Sundaram told the Court that "Mistry had clarified that he was not interested in ‘returning’ to the chairman’s post” but was fighting for the rights of minority shareholders. Mistry, whose family holds 18% of the capital of Tata Sons, had withdrawn his claim to chairmanship of the Group in a statement on January 5, noted ET. "Nothing has been done to dilute the minority shareholding,” stated Chief Justice S. A. Bobade who led the bench that included Justices B. R. Gavai and Surya Kant.
Senior advocate Harish Salve who appeared for the Tata Group stated: "We do not propose to take any steps under Article 75 of the articles of association of the company” that permit the company to order a transfer of minority shares.
From l: Ratan Tata, Cyrus Mistry and Nusli Wadia
Industrialist and chairman of the Wadia Group Nusli Wadia withdrew his defamation suit against Ratan Tata on January 13, 2020 a week after the Supreme Court asked the parties to resolve their differences like "mature people,” noted the Business Standard (BS) in its online edition on the same day. The Court said that "Ratan Tata and others had no intention to defame him.”
Wadia had sought Rs 3,000 crores in damages in a defamation suit in December 2016, after being voted out as an independent director on the boards of three Tata companies "for ostensibly acting against the Group’s interests,” stated The Economic Times (ET) on January 7. The report detailed that Tata had written to the shareholders stating why Wadia had to be removed. Tata’s letter was "intended to defame (Wadia) and destroy his reputation,” Wadia had told the Court through his lawyer C. A. Sundaram. "They could have placed the matter before the board of directors,” noted Wadia.
"Cyrus’ removal was a malicious and vindicative act of one person (Ratan Tata),” Wadia told ET on December 18, 2019 when NCLAT passed its order to reinstate Mistry. "I am proud I was the only independent director who believed in Mistry and was opposed to his unjust removal,” he said. Mistry’s ouster, he stated, was "not in keeping with the ethos, ethics and principles laid down by (erstwhile Group chairman) J. R. D. Tata... Cyrus proved his capabilities to grow the institution and correct all the unprofitable and ill advised forays and investments made by the (Group) companies, which led to tens of thousands of crores of unviable debt in each of these companies prior to his becoming chairman. It’s this that was the cause for his uncalled for, unjust, vengeful removal.”