- Appointment of N Chandrasekaran to the post of chairman was illegal: Appellate Tribunal
- Tata Sons gets 4 weeks to appeal against the verdict
- Mistry was removed as the chairman of Tata Sons in October 2016.
- The board of Tata Sons removed him due to lack of trust in Mistry.
- Mistry’s argument – This action was against the rules of the Companies Act
The National Company Law Appellate Tribunal (NCLAT) on Wednesday ruled in favor of Cyrus Mistry, saying that Mistry should be made the chairman of Tata Sons again, it was wrong to remove him. Mistry reached the Appellate Tribunal after losing the case to the National Company Law Tribunal (NCLT). The Appellate Tribunal reserved the decision in July.
Cyrus Mistry going to be the chairman of Tata Sons again
The NCLAT also dismissed the appointment of N Chandrasekaran as the chairman of Tata Sons. Chandrasekaran became the chairman in February 2017. Tata Sons sought 4 weeks to appeal against the NCLAT decision. The NCLAT approved this.
In July 2018, NCLT rejected Mistry’s claim
Cyrus Mistry was removed as the chairman of Tata Sons in October 2016. Two months later, two-family investment companies – Cyrus Investment Pvt Ltd and Sterling Investment Corp – were challenged by Mistry on the Mumbai Bench of the National Company Law Tribunal (NCLT). These companies argued that the decision to remove Mistry was not in accordance with the rules of the Companies Act, but in July 2018 the NCLT rejected the claims. After this, Mistry himself appealed against the NCLT decision.
The NCLT said in a July 9, 2018 decision that the Tata Sons board was competent to remove Cyrus Mistry from the post of chairman. Mistry was removed because the company board and large shareholders did not trust him. Cyrus Mistry became the sixth chairman of Tata Sons after Ratan Tata retired in 2012.
4% decline in shares of Tata group companies
After the NCLAT decision, selling of shares of Tata group companies intensified. Tata Motors was down 3.05% at Rs 174.70 on the BSE. Tata Global Beverages closed at Rs 311.80 with a loss of 4.14%. Also, Tata Power closed the business at Rs 55.50, down 0.98%.