Cyrus Mistry firms move NCLT to halt Tata Sons EGM
Cyrus Investment, Sterling Investment approach NCLT with contempt of court petition against Tata Sons over an EGM to remove Mistry from the board
Mumbai: Two family investment firms of Cyrus Mistry have approached the National Company Law Tribunal (NCLT), seeking to restrain Tata Sons Ltd from going ahead with a meeting of shareholders to eject him as a director from its board.
The holding company of the Tata group has scheduled the meeting for 6 February after being requisitioned by four Tata trusts.
Cyrus Investment Pvt. Ltd and Sterling Investment Corp Ltd, which together hold around 18.5% of ordinary share capital in Tata Sons, filed a contempt of court petition at the NCLT to stop the meeting. A person familiar with the matter said on condition of anonymity that they had sought a hearing as early as on Friday.
The petition claims that Tata Sons calling the extraordinary general meeting (EGM) violates the undertaking given by its lawyers when the NCLT heard an earlier petition filed by the investment firms on 22 December.
The contempt of court petition says that at the 22 December hearing, lawyers for the petitioners, Mistry and the respondents (Tata Sons) had agreed to a consent order that “they will not file any interim application or initiate any action or proceedings over this subject matter pending disposal of this Company petition”.
Because the lawyers agreed to the consent order, the investment firms didn’t press for any specific relief, the new petition said. It added that NCLT had done away with the need for a specific hearing for interim reliefs and had directed that it would conduct a quick hearing on the merits of the petitions in one go.
“Any breach would clearly amount to a wilful disobedience and contempt of the order of this honourable tribunal dated 22 December,” said the new petition.
The petition sought punishment including simple imprisonment for a term which may extend to six months, or a fine which may extend to Rs2,000, or both, for contempt of court by all those involved, including Tata Sons interim chairman Ratan Tata, directors of the holding company and some trustees of Tata Trusts.
“There is no contempt. We will make our submissions to the NCLT,” said a Tata group spokesperson.
The earlier petition refers to a 20 December suit filed by the Mistry family firms to protect their interests against alleged mismanagement and oppression of minority shareholders at Tata Sons. It asked the court to dismiss the board of Tata Sons and also direct the firm, the trusts and their officials not to remove Mistry from the board of the holding company.
Mistry, who was ousted as chairman of Tata Sons on 24 October, has since resigned as a director from all Tata group operating companies. He first became a director of Tata Sons in 2006 after his father stepped down from that position.
“While Tata Sons has all the rights to call for an EGM, the tribunal may want to keep it in abeyance as it is not unrelated to the matter at hand,” said Shriram Subramanian, founder of proxy advisory firm InGovern Research.
After the first petition filed by the Mistry family firms, Tata Sons and trustees of Tata Trusts filed affidavits denying allegations against them. The NCLT will hear the first petition on 31 January.