‘Mistry’s ouster an act of oppression’

Mumbai: The decision to remove Cyrus Mistry as executive chairperson of Tata Sons was “an act of oppression to get minority shareholder to toe the line”, senior counsel C A Sundaram, appearing for minority shareholders, argued before

National Company Law Tribunal

(

NCLT

) in Mumbai on Monday.

Sundaram reiterated how Mistry’s sudden removal in October 2016 by Tata Sons’ board was without “any good reason as his performance was, in fact, praised in the preceding months”. He said the removal was not even on the agenda at the meeting but was brought in to “silence the minority”. A bench at NCLT, headed by judicial member B S V Prakash Kumar, resumed a hearing in a petition filed by two companies, held by the Mistry family, alleging acts of oppression and mismanagement committed by Tata Sons, in which they hold 18% minority shares.

“There is an attempt to change the status quo, which was there for 30 years, of a director — from the

Pallonji group

— being on board…If the aim is to silence the minority, it is ex facie oppressive…there has to be proportionate representation on the board,” Sundaram argued. “You want a position on the board?” the NCLT judicial member observed.

The tribunal asked for the definition of ‘mismanagement’ when Sundaram said he would give examples of how Tata Sons was being mismanaged. A brief discussion ensued with Sundaram and Mistry’s counsel Janak Dwarkadas reading out what the statute mentions and the bench asking even senior counsels for the Tatas, including Ravi Kadam and Sudipto Sarkar from Kolkata to chip in. Sarkar said “personal prejudice is not a case of mismanagement”. Sundaram said, “When people managing the company do things prejudicial to the interest of public, member or company…If you usurp decision-making on behalf of Tata Sons, it is mismanagement.” The hearing will continue for a week with senior counsel AM Singhvi set to argue on behalf of Tata Sons.


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