Tatas created shadow board: Mistry counsel
TNN|
Jan 12, 2018, 10.39 AM IST
MUMBAI: The gloves were off on Thursday in a legal battle between Cyrus Mistry and Tata Sons following the former's ouster on October 24, 2016 as its executive chairperson.
Mistry's counsel Janak Dwarkadas said the Tata Trusts created a "shadow board, stage-managed by Ratan Tata and two others" to shake principles of corporate governance. Tata Sons counsel A M Singhvi shot back, calling Mistry a "Trojan horse", who in a proxy litigation through two family-held companies launched an attack on the company clearly as an "complete afterthought". Singhvi said the Mistry family had raised "no objection to the articles in the memorandum of association in their 51 years' association with the company".
Singhvi said, "A remotest objection was raised for the first time after October 2016, after pocketing dividends worth Rs 872 crore between 1991 and 2016." He said the Mistry family had from 1965 invested Rs 69 crore and the valuation in March 2016 was Rs 58,441 crore. They were "laughing all the way to the bank, but stopped laughing when he was sacked", said Singhvi. He was arguing against the case put up by C A Sundaram, counsel for two Mistry family-run companies which, as minority shareholders of Tata Sons, had taken on the Tata group alleging acts of mismanagement and shareholder oppression.
Sundaram had argued that Mistry was removed as he sought to set-straight alleged fraud and mismanagement of AirAsia and because he had proposed a corporate governance framework.
Mistry's counsel Janak Dwarkadas said that Tata Sons was "shooting first and searching for reasons later" and "removing a person who, like a whistleblower, was trying to set right the direction in which the company was going." He said "it was a fit case to wind up Tata Sons". In a case of alleged mismanagement of company's affairs at the cost of public and company's interest, and oppression of minority shareholders' rights by a majority, a final relief that would emanate was the National Company Law Tribunal (NCLT) to find any merit in the allegations would be winding up of the company.
However, pointing to "lack of any details" and "use of only broad brushstroke to avoid giving any details" by the Mistry camp, Singhvi delved into how a challenge by Mistry firms to affirmative vote provision under Article 121 was a "clever subterfuge" and "opportunistic". Singhvi said, "Mistry is challenging also the very Article 118 under which he was selected as executive chairman. Now he is saying strike it off....it is like cutting off a branch you are sitting on." Singhvi also said that a challenge by Mistry to Tata Sons' private conversion plea was a "red herring".
as it was only setting to comply with a statutory need under the new law. His arguments will continue on Friday.
Mistry's counsel Janak Dwarkadas said the Tata Trusts created a "shadow board, stage-managed by Ratan Tata and two others" to shake principles of corporate governance. Tata Sons counsel A M Singhvi shot back, calling Mistry a "Trojan horse", who in a proxy litigation through two family-held companies launched an attack on the company clearly as an "complete afterthought". Singhvi said the Mistry family had raised "no objection to the articles in the memorandum of association in their 51 years' association with the company".
Singhvi said, "A remotest objection was raised for the first time after October 2016, after pocketing dividends worth Rs 872 crore between 1991 and 2016." He said the Mistry family had from 1965 invested Rs 69 crore and the valuation in March 2016 was Rs 58,441 crore. They were "laughing all the way to the bank, but stopped laughing when he was sacked", said Singhvi. He was arguing against the case put up by C A Sundaram, counsel for two Mistry family-run companies which, as minority shareholders of Tata Sons, had taken on the Tata group alleging acts of mismanagement and shareholder oppression.
Sundaram had argued that Mistry was removed as he sought to set-straight alleged fraud and mismanagement of AirAsia and because he had proposed a corporate governance framework.
Mistry's counsel Janak Dwarkadas said that Tata Sons was "shooting first and searching for reasons later" and "removing a person who, like a whistleblower, was trying to set right the direction in which the company was going." He said "it was a fit case to wind up Tata Sons". In a case of alleged mismanagement of company's affairs at the cost of public and company's interest, and oppression of minority shareholders' rights by a majority, a final relief that would emanate was the National Company Law Tribunal (NCLT) to find any merit in the allegations would be winding up of the company.
However, pointing to "lack of any details" and "use of only broad brushstroke to avoid giving any details" by the Mistry camp, Singhvi delved into how a challenge by Mistry firms to affirmative vote provision under Article 121 was a "clever subterfuge" and "opportunistic". Singhvi said, "Mistry is challenging also the very Article 118 under which he was selected as executive chairman. Now he is saying strike it off....it is like cutting off a branch you are sitting on." Singhvi also said that a challenge by Mistry to Tata Sons' private conversion plea was a "red herring".
as it was only setting to comply with a statutory need under the new law. His arguments will continue on Friday.
(This article was originally published in The Times of India)
