Tata Sons Ltd approached the Supreme Court to appeal against the tribunal order that held former chairman Cyrus Mistry’s ouster as illegal, terming the court’s direction to reinstate him untenable in law and inconsistent with the Companies Act.
In a petition, Tata Sons said the National Company Law Appellate Tribunal (NCLAT) ruling “has created confusion in the working of important corporate entities, some of which are listed companies”.
“The direction to restore Cyrus Mistry for his remaining term, without noticing that the term has come to an end is a recipe for disaster, for the reason that it will create unnecessary confusion in the working of companies and lead to more conflict. Any shadow over the management of any of these companies puts public interest in jeopardy,” said the petition.
NCLAT in December directed the company to reinstate Mistry as chairman and termed the appointment of his successor N. Chandrasekaran illegal. The order puts at risk the holding company’s efforts to cut costs, sell assets and boost growth across Tata group companies.
Mistry was removed as chairman of Tata Sons in a surprise move on 24 October 2016. He was later ousted as a director from the holding company’s board, and then removed from several operating companies in the group.
Mistry’s tenure was to have ended in March 2017.
The appeals court had cited alleged haste in Mistry’s removal as chairman of the Tata group’s holding company, ignoring the interest and oppression of minority shareholders, and mismanagement at Tata Sons as reasons for the ruling.
NCLAT also mandated immediate restoration of Mistry as a director at three Tata Group companies —Tata Consultancy Services, Tata Industries Ltd and Tata Teleservices (Maharashtra) Ltd.
The petition will be heard on 6 January when the court reopens after the winter vacation.