INSUBCONTINENT EXCLUSIVE:
While declining to pass any order on the conversion of Tata Sons into a private company from a public limited firm, NCLAT today asked Tata
Sons not to force Cyrus Mistry to sell his shares in the company till his appeal is pending
The National Company Law Appellate Tribunal (NCLAT) said that pending the litigation here, the Cyrus Mistry camp which was seeking a status
quo over it cannot be "forced to sell shares"
The bench said it would decide over the issue of conversion of Tata Sons to a private company at later stage during the pendency of appeal
A two-member bench headed by its Chairperson Justice S J Mukhopadhaya admitted Mistry's appeal and directed Tata Sons and other
respondents to file their reply within 10 days
NCLAT has listed the matter on September 24 for next hearing
On August 14, NCLAT had reserved order over the interim relief sought by Cyrus Mistry camp
Mistry had challenged the orders of National Company Law Tribunal (NCLT) which had dismissed his plea challenging his removal as chairman
In September last year, Tata Sons had received shareholders' nod to convert itself into a private limited company from being a public
limited company, limiting in effect Cyrus Mistry family's ability to sell their stake to outsiders
A public limited company allows shareholders to legally sell their stake to anyone, but a shareholder of a private limited firm cannot sell
the shares to external investors
The Mistry camp had challenged the July 9 order of the Mumbai bench of the NCLT which dismissed their pleas against his removal as Tata
Sons chairman, as also the allegations of rampant misconduct on part of Ratan Tata and the company's Board
A special bench of the tribunal had held that the board of directors at Tata Sons was "competent" to remove the executive chairperson of
NCLT bench members B S V Prakash Kumar and V Nallasenapathy had also said that Mistry was ousted as chairman because the Tata Sons' Board
and its majority shareholders had "lost confidence in him"
Under the Companies Act 2013, an order of NCLT can be challenged before the National Company Law Appellate Tribunal (NCLAT)
Mistry, who was the sixth chairman of Tata Sons, was ousted from the position in October 2016
He had taken over as the chairman in 2012 after Ratan Tata announced his retirement
Two months after his removal, Mistry's family-run firms Cyrus Investments Pvt Ltd and Sterling Investments Corp approached the NCLT as
minority shareholders, against Tata Sons, Ratan Tata, and some other board members
Mistry in his pleas primarily argued that his removal was not in accordance with the Companies Act and that there was rampant mismanagement
of affairs across Tata Sons
He also alleged that Tata Trust chairperson Ratan Tata and trustee N Soonawala interfered with the day-to-day operations of the group
companies, they acted as shadow directors, and all of the above caused massive revenue loss for the group.
