In a major setback for the Tata Group, the National Company Law Appellate Tribunal (NCLAT) has restored Cyrus Mistry as the chairman of Tata Sons and held illegal the appointment of N. Chandrasekaran as executive chairman. The petition was moved by Mistry and two investment firms challenging his removal from the group.
The judgment was pronounced by a two-member NCLAT bench headed by Chairperson Justice S.J. Mukhopadhaya. Earlier, the Mumbai bench of the National Company Law Tribunal (NCLT) had dismissed the petitions filed by the two investment firms—Cyrus Investments Pvt Ltd and Sterling Investments Corp challenging Mistry's removal.
Later, Mistry had also personally approached the NCLAT over the NCLT order. The Appellate Tribunal had reserved its order in July this year, after completing its marathon hearing over the issue.
Mistry, who was the sixth chairman of Tata Sons, was ousted from the position in October 2016. He had taken over as the chairman in 2012 after Ratan Tata announced his retirement.
The Mistry camp had challenged the July 9 order of the Mumbai bench of the NCLT which dismissed the pleas against his removal as Tata Sons chairman, as also the allegations of rampant misconduct on part of Ratan Tata and the company's board.
A special bench of the tribunal had held that the board of directors at Tata Sons was competent" to remove the executive chairperson of the company. The NCLT bench had also said that Mistry was ousted as chairman because the Tata Sons' Board and its majority shareholders had lost confidence in him".
Two months after his removal, Mistry's family-run firms approached the NCLT as minority shareholders, against Tata Sons, Ratan Tata, and some other board members.
Mistry in his pleas primarily argued that his removal was not in accordance with the Companies Act and that there was rampant mismanagement of affairs across Tata Sons.
