NCLT ruling vindicates its position on Cyrus Mistry, says Tata SonsTata Sons on Monday welcomed the National Company Law Tribunal (NCTL) dismissing the petitions by the Cyrus Mistry camp and said that it vindicates the position of the group.
Tata Sons on Monday welcomed the National Company Law Tribunal (NCTL) dismissing the petitions by the Cyrus Mistry camp and said that it vindicates the position of the group.
"The ruling today by the NCLT dismissing the waiver application of the Shapoorji Pallonji Group companies, on behalf of Cyrus Mistry, represents a vindication of our position. We hope this brings to an end a vexatious campaign against the company, the Tata Trusts and Ratan N Tata. Tata Sons will continue its focus on its future development under the stewardship of our chairman N Chandrasekaran," FN Subedar, chief operating officer of Tata Sons said in a statement late Thursday evening.
"We are pleased that Mistry's claims have been dismissed by the NCLT," he added as he welcomed the NCLT ruling.
Earlier in the day, the NCLT dismissed the waiver application by the Mistry camp filed against Tata Sons. The petitions were filed by two firms belonging to Cyrus Mistry's family, and sought waiver of an eligibility condition for moving the forum against Tata Sons.
Dismissing the petitions, NCLT bench led by BSV Prakash Kumar and V Nallasenapathy said, "The waiver is dismissed, the company petition dismissed."
The reasons for the order will be given out later in the week.
"We interpret the NCLT ruling as demonstrating that the petitioners failed to make a convincing or compelling case that warranted a hearing on alleged mismanagement, oppression or other actions," Subedar said.
Yesterday was the fifth such ruling by the company law tribunals, rejecting reliefs requested by the Shapoorji Pallonji Group companies and Mistry.
"Mistry has made many ill-advised and groundless allegations intended to besmirch the name of the Tata Group. The ruling makes clear that there is no case to be heard," Subedar said.
"Over the past six months, Mistry has failed demonstrably to build a case. We trust that the NCLT's decision brings this matter to a close," he concluded.
The two firms-- Cyrus Investments and Sterling Investments- wanted NCLT to waive the requirement that shareholders hold at least 10 per cent of a firm to file a petition alleging mismanagement and oppression.
While the Pallonji Group owns 18.4 per cent of ordinary shares in Tata Sons, their ownership comes down to only about 2.17 per cent when preference shares are counted.
Together, Pallonji Group is the single largest shareholder in the USD 105 billion group with 18.4 per cent stakes in Tata Trusts, which collectively own 64 per cent in the group.
Aryama Sundaram, counsel for the Mistry family firms, had argued for the waiver citing concerns on voting and veto rights accorded to Tata trustees on the board of Tata Sons.
Mistry, after being ousted from the group as chairman on October 24 last, had alleged that there was mismanagement and oppression of minority shareholders and urged NCLT to use its discretion and waive an eligibility condition for filing such a petition.
The NCLT had on March 6, 2017 held last month that the plea was not maintainable, because the petitioner firms did not meet one of the eligibility criteria prescribed by Section 244 of the Companies Act of 2013.
Mistry contended that under the Companies Act, the tribunal can waive a requirement that petitioner should hold at least one-tenth of issued share capital of the company, or represent at least one-tenth of minority shareholders.
Tata Sons had argued that if preference capital was also considered, the petitioner firms held only 2.17 per cent of the total issued share capital of Tata Sons.