Mistry plea against Tata Sons not maintainable, rules NCLT.
The National Company Law Tribunal (NCLT) has ruled that the petition filed by the investment firms of Cyrus Mistry against Tata Sons and its directors is not maintainable and posted the matter on Tuesday to decide if the requirement can be waived off.
“The petitioners have failed to convince the court that the application is maintainable,” said NCLT member B.S.V. Kumar on Monday. “However, instead of dismissing the petition, the court will hear the matter,” he added.
The petition filed by the investment companies – Cyrus Investments Pvt Ltd and Sterling Investment Corporation Pvt Ltd – of Mr. Mistry alleges mismanagement and oppression of minority shareholders by Tata Sons, Ratan Tata and the directors of the holding company of the diversified conglomerate.
Mr. Mistry was abruptly removed as the chairman of Tata Sons on October 24, 2016.
Incidentally, the issue of maintainability was raised by senior advocate Abhishek Singhvi, who appeared on behalf of Tata Sons when the case came up for hearing for the first time on December 22, 2016. He has said that the Mistry firms do now own 10% stake – minimum requirement to file a petition under the new Companies Act – in the company and hence the petition was not maintainable.
Senior advocate Aryama Sundaram, appearing on behalf of the petitioners, had challenged the contention of Tata Sons.
While the combined stake of the two investment firms of Mr. Mistry is pegged at 18.4% of the ordinary equity shares of Tata Sons, the stake falls below 10% if the preference shares are also taken into account. Tata Sons is of the view that the Mistry firms hold only 2.17% stake in the company.