Will Cyrus Mistry walk tall after SC verdict?

Mistry was ousted in 2016, and amidst a reopened legal battle, experts say there was no compelling factor for Tata Sons to remove him as chairman

Salil Panchal
Published: Jan 13, 2020 11:16:01 AM IST
Updated: Jan 13, 2020 12:20:54 PM IST

Life is not a template and neither is mine. Like several who have worked as journalists, I am a generalist in my over two decade experience across print, global news wires and dotcom firms. But there has been one underlying theme in each phase; life gave me the chance to observe and tell a story -- from early days tracking a securities scam to terror attacks and some of India's most significant court trials. Besides writing, I have jumped fences to become an entrepreneur, as an investment advisor -- and also taught the finer aspects of business journalism to young minds. At Forbes India, I also keep an eye on some of its proprietary specials like the Rich list, GenNext and Celebrity lists. An alumnus of Xavier Institute of Communications and H.R College of Commerce and Economics in Mumbai, I have worked for organisations such as Agence France-Presse, Business Standard, The Financial Express and The Times of India prior to this.

g_126385_cyrus_mistry_280x210.jpgImage: Vipin Kumar / Getty Images

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.”

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(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.)

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  • paul a

    I truly believe that there IS compelling evidence to support tge chairman change at Tata Sons. It was a pure legacy pick and a wait and see for promises fulfilled. Ending in a change. Cyrus pitched for yhe position, gad backing of Lord Bhatacharya UK connection, Cyrus prepared a presentation tentatively received the nod. It is up to the company and the BOD to keep him in on the merits. Whether Cyrus fulfilled expectations is up to Tata Sons Board and honestly Tata. Ratan was not happy about the situation deteriorating which required his involvement. Why Cyrus did not respect his colleagues and from my understanding (he often bad mouthed them and Tata as well), unilaterally made company decisions with consultation and did not relinquish his Irish Citizenship (which was a deal breaker) we will never know. etc etc

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