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The Cyrus Mistry-Tata legal battle reopened in January, this time in the Supreme Court. The Tata group has earned some relief as the Supreme Court has stayed a National Company Law Appellate Tribunal’s (NCLAT) order issued in December, which called to reinstate Mistry as executive chairman of Tata Sons.
The Tatas would look to try and block Mistry’s re-entry into the group. Mistry, on his part, will continue to want to protect the rights of his family’s Shapoorji Pallonji Group that owns a minority (18.37) stake in Tata Sons. “This legal fight has never been about me. It has always been and will always be about protecting the rights of minority shareholders...,” Mistry said in a statement. “In the last three years, both in conduct and in their statements to the world at large, the Tata group’s leadership has shown scant respect for the rights of minority shareholders.”
Mistry, who had succeeded Ratan Tata as chairman of Tata Sons in 2013 and was ousted in late 2016, maintains he will not chase the executive chairman post at Tata Sons or the director’s post at Tata Consultancy Services or Tata Teleservices. He had challenged the decision of the Tata Sons board in 2018 to take the company private. Mistry also alleged oppression and mismanagement of minority shareholders.
Proxy advisory firm InGovern maintains there was no compelling factor for Tata Sons to remove Mistry as chairman. InGovern’s founder and managing director Shriram Subramanian says that Mistry, if reinstated by the Supreme Court, should take up the post and then gracefully resign as executive chairman after an hour. All the other Tata Sons board members should also step down. “The two groups [Tatas and Mistrys] could then reinstate a new board,” says Subramanian. “That will recreate an element of trust between them.”
(This story appears in the 31 January, 2020 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)