Three years into the case of Tata Sons, the National Company Law Appellate Tribunal (NCLAT) has given its verdict in favour of Cyrus Mistry. The NCLAT has named Cyrus Mistry as the legal heir to the post of executive chairman of the Tata Group. The tribunal in its decision also said that it was illegal to appoint N Chandrasekharan as executive chairman. However, the NCLAT, after issuing its order, has given the Tata group four weeks to appeal against it.
In November 2016, Cyrus Mistry was removed as the chairman of Tata Sons. After this, Cyrus Mistry knocked the doors of NCLAT. In a conversation with CNBC TV18 on 18 December, Cyrus Mistry’s lawyer Aryama Sundaram said that Tata Sons was a company that controlled many other companies that have huge public capital. In such a situation, the company’s corporate governance should be the best at every level. Following were his answers to the questions asked on the said channel.
Question: How much is this decision of NCLAT in favour of Cyrus Mistry, how much does it matter and what does it imply?
Answer: Prior to this decision of NCLAT, it was confirmed how he (Mistry) was removed from the post even after he protected their corporate governance, transparency in management and the interests of minority shareholders. The special thing is that the whole matter has been around these things. A company like Tata Sons, which controls many other companies, and the common people have a lot of money in it. In such a situation, it is important that the corporate governance of these companies should be of the best order.
The NCLAT has reserved its decision for four weeks, stating that Cyrus Mistry should be reinstated as executive chairman of Tata Sons. After this, Tata has four weeks to appeal against this decision in the Supreme Court. We believe that you will also be preparing for this legal battle. What will be your strategy?
Basically, I do not think there will be any significant difference on both sides in this case. As far as Mistry is concerned, the company’s concern about minority shareholders will remain the same. This was the first reason that he had approached the court. The same thing will be put before the Supreme Court. We have to see how the Supreme Court looks at this whole matter.
Cyrus Mistry in his petition prominently raised the issue of shareholders’ interest and the interference of Tata Trusts. But there was no talk about the post of executive chairman. What do you say about this?
The whole matter came to light about how Cyrus Mistry was removed from the post of executive chairman. It should not be forgotten that these are the companies of minority shareholders, who had approached the NCLAT. In this, he made it clear that it was not a matter of his personal interest to continue as the chairman of the company. This whole matter is about shareholders and corporate governance, which is very important for better management of the company. The entire process was not followed under the company’s article to remove Cyrus Mistry from his post.
We are talking about the restoration of Cyrus Mistry, which was not given prominence in the arguments.
It would be wrong to say that his reinstatement was not prominently kept in the plea. The real thing is that we strongly oppose the manner in which he was removed. Now if this is wrong, then the law will do its job. However, it is also important to note that this fight is not personal.
The NCLAT has also termed the appointment of N Chandrasekaran as the executive chairman illegal. What do you say about this?
Shouldn’t it? If it is illegal to remove the then executive chairman from his post, then the decision taken even after that will be illegal.
Will we come to know about any kind of uncertainty in Tata Sons since 2016?
I do not think what has happened in the past will be repeated again. This will be for the future. I have not yet read the order completely, but I do not think that anything has happened in the past; there is some uncertainty about that. The thing is that whatever is done next, it should be better for the board management of the company, which should have transparency in management, better corporate governance and it is a matter of interest of the stakeholders.
Do you also intend to file a caveat in the Supreme Court as the Tatas will obviously take the fight forward?
We have not yet received a copy of the judgment. In this case, it has not been decided yet. However, you have to understand that this decision has been taken a few hours ago. In such a situation, it is important to get enough time before taking the right decision.