Tata Sons had nothing to do with ₹22 crore AirAsia fraud: NCLT
NCLT says amendments to Articles of Association were never a problem to Mistrys till Cyrus’s removal
Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) in its order dismissed all allegations against Ratan Tata and Tata Sons Ltd, saying it did not find merit in any of the issues raised.
The tribunal in its 368-page order, which was uploaded on the tribunal’s website late on Thursday, ruled that the Tata Sons Ltd board had nothing to do with the fraudulent transaction of ₹22 crore that ousted chairman Cyrus Mistry had alleged in his plea.
“As to the allegation of fraudulent transaction worth of ₹22 crore, no doubt, it has come out in the forensic investigation conducted by Deloitte revealing the ex-chief executive officer (CEO) of AirAsia India indulged in that fraud, with which none of the directors of Air Asia India has been connected, whereby a fraud committed by a CEO cannot be attributed as fraud committed by the directors of that company,” said the NCLT bench, presided over by B.S.V. Prakash Kumar and V. Nallasenapathy in its ruling.
The tribunal further said that when the issue came before the Tata Sons board on 26 September 2016, the board had unanimously decided to take the investigation to its logical conclusion and later, AirAsia India had lodged an FIR against its former CEO and other private individuals.
“This (Mistry’s) petition speaks nothing about espousing the cause of corporate governance or seeking remedies of oppression and mismanagement of the company, in fact, the Articles of Association against which these petitioners making hue and cry were unanimously approved either by the father of Cyrus (Mistry) or by Mr Cyrus,” said the order. “…though amendments have come to these Articles long before, they did never become a problem to these Petitioners until before Mr Cyrus’s removal.”
According to the judgement, a copy of which was reviewed by Mint, the Tata Group submitted that all the issues raised by Mistry happened between 1993 and 2008; therefore, those issues cannot be issues before this NCLT solely because Cyrus Mistry was removed as executive chairman.
“I have not been surprised at all with the decision. I never thought that there was any merit in the allegations. Simply because if the allegations were correct then they should have been made while Mr Mistry was in the saddle,” said J.N. Gupta, co-founder, proxy advisory firm Stakeholders Empowerment Services.