In a twisted tale of events, the National Company Law Appellate Tribunal (NCLAT) today reinstated Cyrus Mistry as the Executive Chairman of Tata Group, while ruling the appointment of N Chandrasekaran as Executive Chairman illegal.
However, the tribunal also said that the restoration will come into effect only after four weeks. The restoration comes after Mistry personally approached the NCLAT over his removal. Earlier, the Mumbai bench of National Company Law Tribunal had dismissed petitions filed by Cyrus Investment Pvt Ltd and Sterling Investments Corp. Both the firms are backed by Mistry and his family.
Cyrus Mistry and family holds a minority stake in the Tata Sons group with 18.4% of shares. They have been involved in a legal dispute with the Tata Sons and Ratan Tata after his removal from the chairmanship in October 2016. Mistry accused the Tatas of mismanagement and oppression of minority shareholder interests, while Tata has denied all the accusations.
“While this is bound to be contested in the highest court, the legal battle will be negative for investors in the near term,” said Dharmesh Kant, Mumbai-based head of retail research at Indianivesh Securities Ltd, in his media statement. “The order is extremely disturbing for the Tata Group as it raises questions on their corporate governance.”
The verdict only adds up to Tata’s current problems with a major cost-cutting drive going on at its Jaguar Land Rover Automotive Plc unit and back home the company is also facing economic slowdown. Share of Tata Motors fell 5.25% at Rs. 174.95 on BSE after the news came in.
Tata officials are yet to give any official media statement.
HrNxt.com Newsdesk has researchers and writers with an excellent domain knowledge about the talent ecosystem, and the business environment. The team keeps a tab on the latest happenings in the ecosystem to bring most relevant news and insights for our readers. You can connect with our newsdesk at newsdesk@hrnxt.com.