Mistry blames Tata Trusts for his removal despite 'good job'
Ousted Tata Sons chairman Cyrus Mistry today alleged that he was removed despite doing a good job, at the behest of the Tata Trusts.
Two firms controlled by Mistry's family have moved the National Company Law Tribunal (NCLT) here, alleging mismanagement and oppression of minority shareholders at the Tata group.
Mistry and the Tata group are locked in a legal battle after his unceremonious exit.
Mistry's lawyer Janak Dwarkadas today argued before the tribunal that Tata Sons' contention that Mistry was removed as chairman for poor performance was factually wrong.
The Tata group companies outperformed the Sensex by 5 per cent during the first three years when Mistry was in charge and the profit grew by annual 35 per cent during this period, he said.
"The Tata Sons' board had rated Mistry highly, yet (it) wronged him on behalf of the (Tata) Trusts. This was despite a significant increase in cash flows to the Trusts on account of special dividends from TCS and purchase of Tata Capital shares resulting in a windfall of Rs 460 crore," Dwarkadas said.
Nearly 40 independent directors across the group companies had unanimously given Mistry a positive feedback for over two years, the lawyer said.
The nominations and remunerations committee of the Tata Sons had also given Mistry a stellar appraisal in June 2016, but on October 24, he was removed even without a notice, the senior advocate said.
Meanwhile, the counsel for Shapoorji Pallonji Group (which owns 18.6 per cent stake in Tata Sons), Somashekar Sundaresan, told the tribunal that a series of irrational decisions have had an adverse impact on Tata Sons and its shareholders.
Tata Sons is a core investment company under the RBI regulations and its reason for existence is to make investments and nurture them, but returns to Tata Sons are falling below its cost of borrowings, and this adverse impact translates into loss of thousands of crores of rupees, he said.
The Mistry group today filed an affidavit bringing on record the minutes of board meetings of Tata Sons in 2000 which highlighted the need for a "selection committee" for the removal of group chairman.
Tata Sons' lawyer Abhishek Manu Singhvi told the tribunal today that the petitioners had changed a key word in the petition, "oppression", to "prejudice" now, indicating inconsistency in their grouses.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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