Tata Sons has sought dismissal of the petition filed by ousted chairman Cyrus Mistry in the National Company Law Tribunal (NCLT) with “exemplary costs”, alleging it is frivolous and not bona fide . The company also termed the petition as wholly misconceived and not maintainable either on facts or in law, and an attempt to displace control from majority shareholders.
Tata Sons said the petitioners, in the guise of public interest, unlawfully want to displace the control of the majority shareholders and enforce their say, it said, adding, “the petition ought to be dismissed with exemplary costs”.
On December 20, Cyrus Mistry had moved the tribunal asking it to protect Tata Sons from “oppression and mismanagement of minority interest”.
The petition also alleged governance issues and violation of the Articles of Association of Tata Sons due to the interference of “retired outsiders”. The petition was filed under Section 241 of the Companies Act.
Dismissing these allegations, Tata Sons, in its reply to the NCLT said that the petition was nothing but a ruse by Mistry to publicly express his displeasure at the loss of his office and an attempt to besmirch the reputation of Tata Group.
Tata Sons said the petitioners were not eligible to file the petition as they held less than one-tenth of the issued share capital of Tata Sons and do not meet the eligibility criteria under Section 244 to file the petition.
‘Disturbing facts’ It said there were several disturbing facts during Mistry’s tenure as chairman, including slow execution, insufficient details on capital allocation decisions, weak top management team selected by Mistry, and reluctance to embrace Articles of Association.
The affidavit also accused Mistry of reducing representation of Tata Sons’ directors on boards of other major Tata companies in a “systemic and planned manner”.
Mistry’s actions were deliberately weakening the Tata Group structure, which was inimical to Tata Sons’ interest, it added.
Describing the events of the October 24, 2016, board meeting that ousted Mistry, the petition said the resolution was approved by seven out of nine Tata Sons directors. Farida Khambata abstained, while Mistry was not eligible to vote as being an interested director.
Before the board meeting, Ratan Tata and Nitin Nohria personally spoke to Mistry and offered an opportunity to resign voluntarily, which he refused to do.
The decision to replace Mistry was not taken suddenly or in haste.
“It was the result of a chain of events that led to a growing trust and confidence deficit that had to be addressed without delay,” it added.
The affidavit also stated that the petitioners have failed to make out any prima facie case in their favour; if such prayers are granted, it will strangle the functioning of Tata Sons, virtually bringing the affairs to a standstill.
Tata Sons said it was kept in the dark about the deal between Tata Power and Welspun, wherein the former had agreed to acquire the latter.