INSUBCONTINENT EXCLUSIVE:
Mumbai: The National Company Law Appellate Tribunal (NCLAT) delved into Tata Sons' board meeting records and legal documents, like the
Articles of Association, to question the rationale for the removal of Cyrus Mistry as executive chairman
into a private company from a public company.
Tata Sons did not follow the required procedures for the conversion, NCLAT said, adding that
the process laid out under Section 14 of the Companies Act, which includes getting approval from the tribunal for conversion, was not
The group companies were making losses and the business situation had not improved significantly, they had argued.
The court rejected the
June 2016 and many of the reasons given for the removal had not been discussed in board meetings
Legal experts say that Tata Sons can challenge the order in the Supreme Court to stop Mistry from joining the boards of group companies
The order has also stated that Article 121of the Article of Association (AoA) of Tata Trust mandates that the majority decision of the board
nominated by Tata Trusts hold on the board of directors
chairman, N Chandrasekaran
argued.
Commenting on the ruling, Janak Dwarkadas, senior counsel, who appeared for Mistry in the matter in NCLT, said NCLAT has rightly set
aside the disparaging remarks made against Mistry in his personal and professional capacity, and send a clear message to the tribunal that
it should not have commented on the products of the company or other matters and should have confined their decisions to merits
activities before deciding the case on merit
As per the NCLAT order several procedures were not followed in the conversion of Tata Sons to a private company
