In an unexpected development, the National Company Law Appellate Tribunal (NCLAT) has restored former Tata group Chairman Cyrus Mistry as executive chairman of Tata Group. According to PTI, the tribunal has also held the appointment of the current executive chairman N Chandrasekaran as illegal.
However, the tribunal said the restoration order will be operational only after four weeks, which is the time granted to Tatas to file an appeal.
This comes after the National Company Law Tribunal (NCLT) had dismissed petitions filed by Cyrus Investments Pvt Ltd and Sterling Investments Corp challenging Mistry' removal. These two firms were investment firms run by the family of Cyrus Mistry. Following this, Mistry approached NCLAT against the NCLT order.
In what caused an upheaval in the Indian corporate world, in October 2016, Mistry was ousted as the chairman of Tata Sons. Mistry was appointed as the chairman in 2012 after Ratan Tata announced in retirement. He was the sixth chairman of the massive conglomerate.
After Mistry, M Chandrasekaran, who was then the CEO of Tata Consultancy Services (TCS) was appointed as the executive chairman of the group.
Mistry challenged his ouster, which led to a bitter battle between Ratan Tata, the companyâ€™s board, and those in support of Cyrus Mistry.
Two months after his removal, Cyrus Investments and Sterling Investments Corp â€“ who are also minority shareholders of the group â€” approached NCLT against Ratan Tata, Tata Sons and a few other board members.
Mistry argues that his removal was not in accordance with the Companies Act. He also alleged that there was rampant mismanagement across the company. He also alleged misconduct on Ratan Tataâ€™s part.
In July 2018, NCLT upheld the October 24, 2016, decision of the Tata Sons Board of Directors dismissing Mistry.
The NCLT ruled that the Tata Sons board of directors was competent to remove the executive Chairman and that Mistry was removed as the board members had lost confidence in him.
Mistry later quit from the board of six other Tata Group companies but challenged the group and his successor, the former Interim Chairman Ratan Tata's decisions, before the NCLT.
With inputs from IANS and PTI