Mistry ouster premeditated, ambush by Tatas: SP Group – Times of India
[ad_1]
MUMBAI: Shapoorji Pallonji Group argued before the Supreme Court on Thursday that the premeditated removal of Cyrus Mistry as Tata Sons chairman was an ambush by majority shareholder Tata Trusts and was violative of the company’s articles and the Companies Act.
SP said that the October 24, 2016 board meeting of Tata Sons, where Mistry was removed, was the first one attended by Ratan Tata after he retired as the company’s director in December 2012.
It added that no document was placed before the board to support the removal of Mistry. The directors did not even seek to review the legal opinion that the majority shareholder claimed to have taken, thereby showing how they failed to exercise independent judgment as required under Section 166 of the Companies Act.
SP highlighted that Mistry’s removal also violated the company’s articles requiring a committee to be formed to recommend removal of an incumbent chairman and necessitated shareholder approval for premature termination of the chairman. “Was Mistry the MD?” the apex court asked. Tata Sons replied that there is no such contract and it was by operation of law that he becomes MD. Once he was removed as chairman, he also ceased to be the MD.
The SC was hearing appeals and cross-appeals against the December 18, 2019 NCLAT order that reinstated Mistry as Tata Sons chairman. With both sides concluding their arguments, the verdict on the long-fought case is expected to be delivered by the court next year. Tata Sons said that a selection committee recommends a candidate for the chairman’s post. But, his removal can be done by the board as it is privy to his work.
SP submitted that Tata Sons’s nominations and remuneration committee, including Tata Trusts nominees, had recorded its appreciation of Mistry’s performance in June 2016, a few months prior to the boardroom coup. Tata Sons said that the board was the appointing authority and it can revoke and alter any power of the MD (Tata Sons chairman has management powers like an MD).
It further said that the 9-member board decided in near unanimity with regard to Mistry’s removal. However, Mistry himself did not participate in the voting process as the resolution was about him.
SP said that the October 24, 2016 board meeting of Tata Sons, where Mistry was removed, was the first one attended by Ratan Tata after he retired as the company’s director in December 2012.
It added that no document was placed before the board to support the removal of Mistry. The directors did not even seek to review the legal opinion that the majority shareholder claimed to have taken, thereby showing how they failed to exercise independent judgment as required under Section 166 of the Companies Act.
SP highlighted that Mistry’s removal also violated the company’s articles requiring a committee to be formed to recommend removal of an incumbent chairman and necessitated shareholder approval for premature termination of the chairman. “Was Mistry the MD?” the apex court asked. Tata Sons replied that there is no such contract and it was by operation of law that he becomes MD. Once he was removed as chairman, he also ceased to be the MD.
The SC was hearing appeals and cross-appeals against the December 18, 2019 NCLAT order that reinstated Mistry as Tata Sons chairman. With both sides concluding their arguments, the verdict on the long-fought case is expected to be delivered by the court next year. Tata Sons said that a selection committee recommends a candidate for the chairman’s post. But, his removal can be done by the board as it is privy to his work.
SP submitted that Tata Sons’s nominations and remuneration committee, including Tata Trusts nominees, had recorded its appreciation of Mistry’s performance in June 2016, a few months prior to the boardroom coup. Tata Sons said that the board was the appointing authority and it can revoke and alter any power of the MD (Tata Sons chairman has management powers like an MD).
It further said that the 9-member board decided in near unanimity with regard to Mistry’s removal. However, Mistry himself did not participate in the voting process as the resolution was about him.
[ad_2]
Source link
