Cyrus Mistry hails his reinstatement as Tata Sons Chairman, says 'vindication of stand'

After being reinstated as the Tata Sons Chairman by the National Company Law Appellate Tribunal(NCLAT), Cyrus Mistry on Wednesday has stated that the verdict was a vindication of his stand. He added that the verdict was not a personal victory, but a victory of good governance and minority shareholder rights. The NCLAT had stated that October 2017 board order ousting Mistry was illegal.

NCLAT restores Cyrus Mistry as Tata Sons executive chairman after 3 years

Mistry reinstated as Chairman

Earlier in the day, awarding a massive victory to the Mistry, the NCLAT ruled in his favour on his petition challenging his removal as Chairman of Tata Sons. The NCLAT had stated that the board meeting removing Mistry was 'illegal' and had been set aside. Moreover reinstating him as executive chairman of Tata Sons, the NCLAT also set aside the change of Tata Sons from public to private. The Tatas have the time to file an appeal against the order in four weeks as the tribunal said, the restoration order will be operational only after four weeks.

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Mistry challenges ouster

Mistry had appealed to the NCLT Mumbai December 2016 after he was ousted as Tata Sons chairman. Two Mistry family firms had also moved the NCLT Mumbai alleging harassment of minority shareholders and funds mismanagement - both pleas were set aside. But when the firms moved NCLAT in 2017, the plea was accepted initially but was later dismissed by the principal NCLT bench in Delhi. Finally, on August 29, the NCLAT admitted Mistry's plea in his personal capacity challenging his ousting and ruled in his favour on Wednesday.

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Why was Mistry ousted?

Reports state that the reason for Mistry's ouster was due to his constant disagreement with Tata chairman emeritus Ratan Tata on various deals. The flashpoint between the two was reportedly when Mistry greenlighted Tata Power’s $1.4-billion acquisition of Welspun’s solar farms without allegedly seeking approval from key shareholders of Tata Sons or Tata himself. The deal had reportedly not followed due process in line with the group's rules, leading to Mistry's ouster and TCS chief N Chandrashekharan's subsequent appointment as board Chairman.

The Tata Trusts - including the larger ones like Sir Dorabji Tata Trust and Sir Ratan Tata Trust — together control about 66% of Tata Sons, holding majority shares. Meanwhile, the Mistry family owns an 18.4% stake in Tata Sons, which amounts to 3% if preferential shares are excluded. Mistry had taken over as the group's chairman in 2011 from Ratan Tata but was then termed as 'out to destroy the core values that the group stood for', as per reports.

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