Ratan Tata, honorary chairman of Tata Sons, has himself filed a petition in the Supreme Court against the order of the National Company Law Appellate Tribunal (NCLAT) favouring Cyrus Mistry. Tata has alleged that Mistry had taken over the powers of the members of the board of directors and tarnished the image of the ‘Tata brand’.
Tata says that Mistry was “lacking in leadership”. He alleged Mistry was reluctant to distance himself from his family business even after he became the chairman of Tata Sons, despite his selection being conditional.
Tata filed a petition in the Supreme Court on Friday against the recent order of the NCLAT to reappoint Mistry as chairman of Tata Sons. Earlier, Tata Sons had challenged the order in the apex court on Thursday already.
Tata today said in his appeal Mistry was not ready to separate himself from his family business, even risking situations of potential conflict of interest though this was a precondition of his appointment to the post.
Tata alleged that members of the board of directors of Tata Sons were feeling isolated in the affairs of the group of companies where Tata Sons had invested heavily. The board of directors of Tata Sons opposed the decisions taken in such cases, he said.
Tata cited the Tata Group’s unsuccessful joint business with Japanese company Docomo, saying that the way Mistry handled the matter affected the Tata Group’s reputation. He said, “The Tata Sons brand is not identified as one that would run away from statutory responsibilities. Keeping to your commitments is one of the best values of Tata Sons and Tata Sons prides itself on this. Tata Sons’ reputation has been affected by the controversy with Docomo.”
The reputed entrepreneur called NCLAT’s decision wrong, saying that the tribunal, while delivering the verdict, considered Tata Sons to be a company run by two groups. He said, “Mistry was chosen as the executive chairman of Tata Sons in a completely professional manner and not as a representative of the Shapoorji Pallonji Group, a company with an 18.4% stake in Tata Sons.”
Tata said in the petition, “The NCLAT wrongly held that someone from the Shapoorji Pallonji Group becomes a director of Tata Sons under a statutory right. This is wrong and contrary to the constitution of Tata Sons. The constitution of Tata Sons is binding on all shareholders, including Shapoorji Pallonji Group.”
Tata added that the NCLAT order referred to 550 emails between Mistry and him. He said the emails were between the honorary chairman and chairman Cyrus Mistry, not the individuals who came to court.
Tata has said in the petition that it is extremely unfortunate and disappointing that NCLAT made unfavourable comments against him without proof even though he spent over half his age to bring the Tata Sons and Tata Group operating companies up to the class of top global companies.