NCLT: Tatas oppose SP Group representation on board
Presence of any Shapoorji Pallonji Group nominees on the Board of Tata Sons or their involvement with the company in any manner will not be in the best interest of Tata Group, Ratan Tata's counsel told the NCLT today.
Tata's counsel S N Mukherjee told the tribunal that both - Pallonji and Cyrus Mistry - were elected to the Board of Tata Sons by virtue of the Tata Trusts voting in their favour and not out of their own motion.
The counsel argued that damaging acts have been done by Mistry post his removal.
Mukherjee argued that Mistry followed a "scorched earth" policy by making baseless allegations and eroding shareholder value.
He argued that Mistry leaked confidential information of Tata Sons and Tata Trusts, made scurrilous attacks on Ratan Tata, N A Soonawalla and other Trustees as regards their involvement in Tata Group over decades.
The counsel also told the tribunal that the SP Group has alleged (as per Mistry's information and belief under oath) that Tata has financed terrorist organisations.
Mukherjee argued that such allegations are personal attacks, which is "not just defamatory, but perjurous per se".
He added that the continuation of Mistry or SP Group will only make matters worse instead of resolving any issues.
Mukherjee, while addressing the tribunal on conflict of interest, said that Tata had requested (keeping in mind any conflict of interest issues) that there should not be any large transactions between SP Group and Tata companies.
The counsel argued that initially Mistry suggested that his remitting his positions in the SP Group was sufficient for compliance.
Mukherjee argued that it took over a year of persuasion by Tata to convince Mistry of the high governance standards expected of him as chairman of Tata Sons.
Cyrus Investments and Sterling Investments filed the amendment pleas on November 3 and the National Company Law Appellate Tribunal (NCLAT) had in September last year allowed Mistry firms' plea seeking a waiver of the 10 per cent minimum shareholding eligibility criterion to be able to move the tribunal against Tata Sons.
The Mistry family owns 18.4 per cent stake in Tata Sons, which owns the over USD 103-billion diversified Tata Group.
But the holding is under 3 per cent if the preferential shares are excluded (a point the Tatas stressed), thus not meeting the criterion of having at least 10 per cent ownership in a company for filing a case of oppression of minority shareholders under the Companies Act.
Mistry is locked in a legal battle with the Tatas since his sacking as chairman of Tata Sons on October 24, 2016, and removal as a director on February 6, 2017.
The appellate tribunal had said that although Mistry's companies did not meet the minimum shareholding norm, under exceptional circumstances, this statutory requirement can be waived.
It directed the NCLT, which had dismissed Mistry's petition against Tata Sons on the ground of not meeting the minimum shareholding criterion, to decide the case in three months.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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