Cyrus Mistry has been reappointed as the Executive Chairman of Tata Sons, which is the holding company of the Tata Group, after the National Company Law Appellate Tribunal declared that the appointment of Natarajan Chandrasekaran as Executive Chairman of the salt-to-software conglomerate, was illegal.
The appeals court has upheld that Cyrus Mistry was unrightfully ousted as the Chairman of Tata Group, thus making it a loss for the Chairman Emeritus Ratan Tata, according to the Press Trust of India.
This decision comes about a year after the tribunal ruled that Tata Sons cannot force Cyrus Mistry to sell his shares till his appeal. Back in 2016, Mistry was ousted from the Tata Group’s board thus sending shock waves across the Indian corporate world.
At present, Mistry is the Managing Director of Shapoorji Pallonji & Company, a part of the Shapoorji Pallonji group owned by his family. He had joined the Board of Shapoorji Pallonji & Company in 1991 and assumed his current role as MD in 1994.
The case continues..
Cyrus Mistry joined the board of Tata Sons Ltd. in 2006 and became the Deputy Chairman in November 2011 and took over from Ratan Tata as the Chairman in December 2012.
However, on October 24, 2016, Mistry was ousted from his post after which he sought the legal route to challenge his removal by filing petitions against the Board of Tata Sons which took him to the National Company Law Tribunal that gave him an unfavorable verdict, after which he knocked on the doors of the appellate body in order to get back his position in the Tata group.
In July 2018, NCLT had dismissed Mistry’s plea that challenged his removal from the board as the Chairman of Tata Sons.
Even though the Mumbai bench of the NCLT held that the Tata Sons board was equipped enough to oust him and replace him with Ratan Tata, a two-judge panel of India’s National Company Law Appellate Tribunal ruled on December 18, 2019, that Ratan Tata’s actions were “oppressive” and that “the appointment of a new chairman was illegal”.
Moreover, Tata Sons turned the company from a previously public firm to a private one--a move that was deemed as unlawful by the National Company Law Appellate Tribunal.
This particular order is set to be implemented four weeks from December 18, 2019, as the Tata Group has the option to further challenge this decision in the Supreme Court.
Mistry has had a long run in the Tata Group where in addition to being the Chairman of Tata Sons, he was also the chairman of leading Tata group companies including Tata Steel, Tata Motors, Jaguar Land Rover Automotive, Tata Consultancy Services, Tata Power Company, The Indian Hotels Company, Tata Global Beverages, Tata Chemicals, Tata Industries, and Tata Teleservices.
After Mistry’s his removal from the position, Ratan Tata was named the interim chairman until N Chandrasekaran was appointed as the chairman in 2017.
Now, if Mistry were to return to his old office, the Tata Group employees who have been working in a tumultous economy, thanks to the current market forces, would also have to gear up for a transformation in leadership, yet again.