Vehemently opposing Mistry's ouster in 2016, SP Group’s counsel argued that the group is within its legal rights to seek proportionate representation on the board of Tata Sons.

Ratan Tata and Cyrus Mistry
Money Tata vs Mistry Thursday, December 17, 2020 - 10:43

Former Tata Sons Chairman Cyrus Mistry on Wednesday told the Supreme Court that 2016 board meeting had no agenda for his removal and Articles of Associations (AoA) were breached in his ouster.

As the legal battle in the Tata-Mistry case entered its sixth day, senior advocate Shyam Divan, representing Sterling Investment - a Shapoorji Pallonji Group firm, contended before a bench headed by Chief Justice S.A. Bobde that the Tata Sons' Articles of Association of Tata Sons lay down the process of appointment of the Chairman, and should have been followed while in their removal.

Vehemently opposing Mistry's ouster in 2016, Divan argued before the bench also comprising Justices A.S. Bopanna and V. Ramasubramanian that the SP Group is within its legal rights to seek proportionate representation on the board of Tata Sons.

He contended that the Board did not have any grievance against Mistry, and instead it noted that he worked for the welfare of the company and his contributions were appreciated. "No reasons for removal were recorded," he added, citing that one of the directors was a Tata Trusts nominee and the other two were nominated personally by Ratan Tata.

"Other two who voted for his removal, four months prior had praised his work," Divan noted.

He submitted before the bench the two groups - SP Group and Tata Group - had a long-standing relationship, which was based on "good-faith" developed over decades.

Divan added that on October 24, 2016, when Mistry was removed as the Chairman, Ratan Tata was not a member of the board of directors of Tata Sons, when the meeting of the board was commenced. Divan will continue to argue the matter on Thursday.

In January this year, the Supreme Court had stayed the NCLAT order reinstating Cyrus Mistry as Executive Chairman of the Tata Group, saying "the tribunal granted a prayer, which was never made". Both, Tata Sons and the SP Group have filed cross appeals in the top court challenging this order.

Earlier, the Tatas had termed share-swap separation proposal of the Shapoorji Pallonji Group, which has 18.37 per cent stake in Tata Sons, as "nonsense". And the SP group said the entire case was of "oppression" of the SP Group by Tata Sons.

Senior advocate Harish Salve, representing the Tatas, opposed SP group proposal that its stake be swapped with the shares in the Tata Group listed companies. The SP group, which has claimed its stake is worth Rs 1.75 lakh crore, is seeking pro-rata shares in listed companies in Tata group for its stake in Tata Sons Private Ltd (TSPL), the holding company of group firms.

Salve, rejecting the offer, said that this would lead to a situation where the SP Group would be again holding minority stakes in listed firms in Tata Group.

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