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Cyrus Mistry files contempt petition at NCLT against Tata Sons for calling EGM

India TV Business Desk Mumbai 12 Jan 2017, 8:44:32 AM IST
India TV Business Desk

Outset Tata Sons chairman Cyrus Mistry's investment firms have filed a contempt of court petition with the National Company Law Tribunal (NCLT) against the salt-to-software conglomerate for calling an Extra-ordinary General Meeting (EGM) to remove former as a Director on its Board.

According to people privy to the development, the contempt of court petition with the NCLT, Mumbai was filed on Wednesday against the company and its directors.

The petition, filed by two family firms of Mistry -- Cyrus Investment and Sterling Investment, claimed that Tata Sons calling an EGM violates the undertaking given by its lawyers when the NCLT heard an earlier petition filed by the investment firms on December 22.

“The respondents have committed a breach of the NCLT order passed on December 22 by issuing a special notice on January 3, 2017 for the removal of Mistry as a director from the board of Tata Sons, in clear violation of the order,” the application alleged.

The two firms, which together hold around 18.5 per cent of ordinary share capital in Tata Sons, has urged the NCTL to pass an order to restrain Tata Sons Ltd from going ahead with a meeting of shareholders to eject him as a director from its board. A person familiar with the matter said that they had sought a hearing as early as on Friday.

After ousting him as Chairman last year, Tata Sons has called an EGM on February 6 to remove Cyrus Mistry as director from the company’s board.

On the other hand, Tata Sons responded by saying ‘there is no contempt’. 

“We will make our submissions to the NCLT,” the group said.

The development comes days after Tata Sons filed an over 200-page affidavit with the NCLT. 

The affidavit, among other things, alleged that Mistry had under-performed as the Chairman of Tata Sons, which led to a decline in dividend payments to Tata Trusts. The affidavit also pointed out that the Board of Tata Sons had lost confidence in Mistry.

Tata Sons had abruptly removed Mistry as its Chairman on October 24 and sought his ouster from operating companies like Tata Motors and TCS. Mistry subsequently resigned from the board of six companies, but dragged Tata Sons and his interim successor Ratan Tata to the National Company Law Tribunal. 

Tata Trusts hold 66 per cent stake in the holding company of the Tata Group, whereas Mistry's family holds over 18 per cent interest.