New Delhi: In a major turn of events, the National Company Law Appellate Tribunal (NCLAT) on Wednesday ordered the restoration of Cyrus Mistry as the Chairman of Tata Group.
The appellate tribunal, however, allowed for the suspension of part of the order on the reinstatement of Mistry as Executive Chairman of Tata Sons for four weeks, which means the Mistry will have to be reinstated as Chairman only after the said period. Tata Group, during this time, can appeal against the order in the Supreme Court.
The two-judge bench headed by NCLAT Chairman Justice S.J. Mukhopadhaya also held the appointment of N. Chandrasekaran as the Executive Chairman as illegal.
In his plea, Mistry had, among other allegations, said that there is external interference in the operations of Tata Sons and the interests of the minority shareholders were oppressed.
Thereby, in another major blow for Ratan Tata, the former Group Chairman, the tribunal directed him to stay away from the operations of the board.
The NCLAT said that the restoration order will be operational after four weeks and Tata Group can appeal in the Supreme Court during this period.
The bench further said that the NCLT Mumbai bench’s order dismissing Mistry’s charges against the group over his ouster was avoidable.
It also held the proceedings of the board meeting of October 24, 2016, which dismissed Mistry as the Executive Chairman as illegal. The tribunal also held the conversion of the company from a public company to private as illegal and has asked the Registrar of Companies to again recognize the company as public. The company had in 2017 decided to convert into a private company whereby the shareholders would not be able to trade their shares, which was vehemently opposed by Cyrus Mistry and his family who have an 18.4 percent stake in Tata Sons.
A private limited company is a business entity that is held by private owners. This type of entity limits the owner’s liability to their ownership stake and restricts shareholders from publicly trading shares.
Tata Sons had been a private limited company since 1917. It was deemed to be a public company in 1976 on the grounds of turnover according to Section 43(A) of the Companies Act, 1956. Last August, the company got the RoC’s nod to become private again. (IANS)
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