Mumbai: The National Company Law Tribunal (NCLT) has asked Cyrus Mistry to file a rejoinder within seven days in the petition filed by his family-controlled firms against Tata Sons Ltd. The tribunal has asked Mistry to prove his allegations against Ratan Tata, Tata Trusts and others named in the petition with material facts. The next hearing is on 31 January.
The petition had, among other things, asked NCLT to scrap the board of Tata Sons and also prevent the company from issuing securities which would dilute the Shapoorji Pallonji group’s 18% stake in the holding company.
The tribunal refused to grant interim relief and also ordered Mistry and his family investment firms not to apply for relief in the case before any other court or forum till it disposes the matter after a final hearing.
Simultaneously, NCLT has given the respondents—Tata Sons, its directors, the Tata Trusts and their trustees—two weeks to file their response to the petition and the rejoinder to be filed by Mistry in the petition. After that, another 15 days will be given to all the parties in the case to file additional affidavits and rejoinders.
On Tuesday, Cyrus Investments and Sterling Investments filed a petition citing oppression to minority shareholders and mismanagement of Tata Sons. The petition made far-ranging allegations against Tata Sons, Ratan Tata and some of his friends and associates, citing corporate governance violations, possible breach of insider trading regulations and imprudence and lack of probity in certain business decisions.
“Tata Sons believes that the petition is not maintainable in law and the court will hear Tata Sons on this issue at the outset at the next hearing. Tata Sons does not wish to state any further since the matter is sub judice,” the holding company said in an emailed statement.
The tribunal bench, headed by B.S.V. Prakash Kumar, argued with the petitioner’s lawyer, A. Sundaram, that there is no document as yet to prove Ratan Tata’s involvement in the malpractices alleged in the petition.
“Are you taking out your grudge here because you (Mistry) have been sacked?” the tribunal asked.
The petitioner’s lawyer claimed that the articles of association was misused by Tata Sons and its trusts to oppress the minority shareholder (Shapoorji Pallonji) against the interest of Tata Sons and that Mistry was removed by the holding company on mala fide grounds, which was not in the interest of the group.
According to Sundaram, the decisions of Tata Sons have had a cascading effect on its listed companies.
NCLT asked why Mistry was silent prior to his ouster from the Tata group. Mistry had been serving as a director on the Tata Sons board since 2006. The tribunal also asked Sundaram to mention the date when Mistry saw Tata Trusts starting to act for their own benefit as alleged in the petition.