Ratan Tata also in SC against the Mistry order: lacked leadership
NEW DELHI: President Emeritus of Tata Sons Ratan Tata On Friday he moved to the Supreme Court seeking complete annulment of the ruling of the National Court of Appeals for Company Law (NCLAT), which had ordered Cyrus Mistry The reinstatement as executive president and described his expulsion as illegal.
On December 18, a two-judge NCLAT restored Mistry, 51, to the position he had held for almost four years, and said that N Chandrasekaran's appointment as president was therefore illegal.
Tata, who owns 65.89% of the capital of Tata Sons, said that NCLAT misunderstood and misinterpreted documents to conclude in an illogical and uncharitable way that he had taken a coup d'etat to expel Mistry without ceremonies.
This is Tata's second personal petition in the high court, the first one filed almost a decade ago to protect the right to privacy when the contents of the Niira Radia tapes were published. Tata Sons had filed a separate petition on Thursday challenging the NCLAT ruling.
Tata said Mistry rejected the offer to resign honorably on October 24, 2016, which led to his dismissal as the board of directors was convinced that Mistry had spoiled Tata Sons's commercial reputation by showing stubbornness in unfairly pursuing the DoCoMo litigation. .
A dazzling example of Mistry's lack of leadership skills that brought a bad reputation to the Tata Group was the way he handled the DoCoMo litigation. It was during his tenure that Tata Sons reneged on its word with DoCoMo under the agreement citing purely legal and technical arguments. Even after an adverse verdict was delivered in the arbitration, Mistry attempted to resist complying with the legal obligations further,” Tata said, revealing for the first time that Tata Group had wronged DoCoMo, which had invested in Tata Teleservices.
He added: “This is not what the Tata Sons brand represents. Honoring their commitments is one of the greatest virtues of Tata Sons of which it prides itself. The dispute with DoCoMo, which was widely covered by the press, brought a bad reputation to Tata Sons.
He said Mistry also failed to timely capitalise on business opportunities and Tata Sons’ financial performance under his tenure was “deeply unsatisfactory”. He also cited Mistry’s reluctance to meaningfully disassociate from family business after becoming Tata Sons’ executive chairman, gradual concentration of powers in his hands in Tata Group companies to alienate board members, surreptitious acquisition of assets of Welspun Renewables Energy Ltd and Tata Motors’ rights issue as reasons for the board’s “complete loss of trust in Mistry’s ability to lead from the front and for the future”.
The petition said that NCLAT construed the ouster of Mistry by the board as “some sort of retaliation by Ratan Tata for the purported governance structure Mistry was trying to bring in”.
In this regard, the contested judgment has purchased the theory of harmful interference erroneously asserted by Cyrus Investment and Sterling Investment (part of Shapoorji Pallonji Group ) and as a result, unfairly and in an unwarranted manner, made adverse observations against Ratan Tata, ”it said, adding,“ It is unfortunate and distressing that NCLAT's judgment, without providing any proper evidence, has passed adverse remarks against Ratan Tata who you have spent more than half of his life in building the name of Tata Sons and other Tata operating companies to one of the top global companies. ”
The ruling not only creates an incorrect legal precedent that is vulnerable to misuse against several companies, including public sector and government companies, but also provides relief that was never sought, Tata said.