Not corporate governance, Cyrus Mistry eyes foothold in group: Ratan Tata2 min read . Updated: 10 Jul 2020, 10:52 PM IST
Cyrus Mistry is fighting a court battle against Tata Sons over his ouster from the Tata group
Ratan Tata, chairman emeritus of Tata Sons Ltd, has accused his former protege and erstwhile Tata group chairman Cyrus Mistry of misleading the Supreme Court in the ongoing legal tussle between the two sides.
Tata alleged that Mistry’s inherent aim is to get a foot in the door at Tata Sons, the group’s holding company, instead of the larger issues of corporate governance as being projected by Mistry.
In an affidavit filed before the Supreme Court on 8 July, which was reviewed by Mint, the 82-year-old Tata maintained that the demand for directorship on board of Tata Sons by Mistry firms “is a calculated strategy orchestrated by Cyrus Mistry".
“The litigation is to keep the proverbial pot boiling by repeating and discovering newer claims and grounds to seek a right that they never had either in law or practise," Tata told the apex court.
Mistry is fighting a court battle against Tata Sons over his ouster from the Tata group, and is seeking proportional board representation as the largest shareholder in Tata Sons.
Mistry, who represents a group of firms that together hold a 18.33% stake in Tata Sons, has been embroiled in a courtroom battle since 2016 when he was sacked on account of alleged non-performance. Mistry continues to vehemently deny the charges and has cited his feud with Ratan Tata over internal affairs of the Tata group as the key reason for his ouster.
In his affidavit, Tata contended that the ongoing litigation by the Mistry firms is a smokescreen to deflect attention from Mistry’s own failing as chairman of Tata group. “If Cyrus Mistry had any genuine issues of concerns, which needed to be disclosed to any shareholder or relevant regulatory body, then it was his fiduciary duty to disclose at the relevant time. Raising these issues only after he was replaced from the position of chairmanship was solely an act of petty sensationalism," said Tata.
Tata further alleged Mistry has made “reckless allegations" against him and the Tata group, which Ratan Tata maintained was reflective of the “limitless capacity of Mistry in running a smear campaign against me".
In the affidavit, Tata, in concurrence with arguments made by Tata Sons and Tata Trusts, rejected the contention by Cyrus Investments firms that Tata Sons is a quasi-partnership between the two sides. Under quasi-partnerships, a partner can typically claim shareholder rights, which include having a say and participation in the management. The Tata group has argued that Mistry firms did not have adequate shareholding for a directorship nor is it laid out as a part of any contractual obligation.
"Quasi partnership does not limit the relationship to documented written agreements but recognises action, conduct, mutual trust and confidence. Various letters and transactions between two group clearly shows how the relationship between two partners were based on mutual trust, confidence and personal relationship which went beyond the equity investment in Tata Sons," an official of Mistry group on condition of anonymity said.