New Delhi–Tata Sons on Monday welcomed the order of an apex corporate tribunal which ruled against a petition that had alleged mismanagement by the company.
The petition by Cyrus Mistry’s investment companies — Cyrus Investment and Sterling Investment Corp. — had alleged mismanagement and oppression of minority shareholders by the company.
The order against the petition was given by the National Company Law Tribunal (NCLT) on April 17, 2017. It had ruled that the petitioners representing certain companies of the SP Group (SP Group Companies) failed to establish the merits of the petition.
According to Tata Sons, the order has also noted that petitioners failed to demonstrate any cause of action against the company, the Tata Trusts and Ratan N. Tata.
The company pointed out that the tribunal did not see a prima facie triable case to take forward.
“The Tata group, led by Tata Sons, has always been committed to the highest ethical standards and principles of governance. We welcome the NCLT’s order, and it is an endorsement of these values and principles,” N. Chandrasekaran, Executive Chairman of Tata Sons, was quoted as saying in a statement.
“Tata Sons and the operating companies are focussed on growth to deliver value to our shareholders, and we thank all stakeholders for their continued support.”
On April 17, the NCLT had dismissed a plea filed by Mistry’s investment companies to waive off a regulatory bar on them as their original petition had been rendered non-maintainable by the March 6th order.
On March 6, the NCLT had ruled against the maintainability of the petition filed against Tata Sons, which cited governance lapses and compromise of minority shareholder interests after Mistry was ousted as Chairman of the holding company of the industrial conglomerate.
The top corporate tribunal held that Mistry’s family firms were not qualified to file a petition against Tata Sons alleging mismanagement and oppression of minority shareholders.
Under the current rules, only a shareholder with more than 10 per cent effective shareholding can file a minority interest petition with the NCLT.
However, the Companies Act empowers the NCLT to waive off this requirement for a petitioner to hold at least 10 per cent of the total issued share capital of the company to qualify for filing a minority interest petition.
Besides the waiver plea, the main company petition which was filed against Tata Sons was also rejected on April 17.
Subsequently, Mistry’s investment companies approached the New Delhi-based National Company Law Appellate Tribunal (NCLAT) on April 19 against the March 6, 2017 order by NCLT which had declared their main petition against Tata Sons as non-maintainable.
On October 24 last year, Tata Sons’ Board ousted Mistry as its Chairman and appointed Ratan Tata as Interim Chairman.