The National Company Law Appellate Tribunal (NCLAT) on Thursday dismissed Cyrus Mistry’s petition against Tata Sons on grounds of maintainability, but granted a waiver with respect to a criteria related to shareholding that allows the former chairman of Tata Sons to move the National Company Law Tribunal (NCLT) again.
Mr. Mistry, who was abruptly ousted as the chairman in October last year, had moved the appellate body after his petition was dismissed by the NCLT in April. The petition filed by the investment companies – Cyrus Investments Pvt. Ltd. and Sterling Investment Corporation Pvt. Ltd. – of Mr. Mistry alleged mismanagement and oppression of minority shareholders by Tata Sons, Ratan Tata and the directors of the holding company of the diversified conglomerate.
Incidentally, Tata Sons had also questioned the maintainability of the plea at NCLT as they argued that the Mistry firms did not hold 10% stake in the company to file the petition, which is the minimum requirement to file a petition under the new Companies Act.
While the combined stake of the two investment firms of Mr. Mistry is pegged at 18.4% of the ordinary equity shares of Tata Sons, the stake falls below 10% if the preference shares are also taken into account. Tata Sons is of the view that the Mistry firms hold only 2.17% stake in the company.
With the NCLAT granting a waiver, Mr. Mistry can once again file a case at NCLT that will hear the matter related to waiver on merit.
“The ruling of the National Company Law Appellate Tribunal is a welcome vindication of what we have stood for and the values for which we are pursuing the petition against oppression and mismanagement of Tata Sons,” said a statement issued by the office of Cyrus Mistry.