Mistry Doesn't Have A “Shred Of Paper” As Evidence Against Venkataramanan: NCLT
NCLT said such scurrilous statements were made by Mistry and the petitioners “with impunity flouting all legal principles” and without producing even a “shred of paper” as evidence
The recent order by the Mumbai Bench of the National Company Law Tribunal (NCLT) on the Cyrus Mistry versus Tata Sons case gave a clean chit to Tata group doyen Ratan Tata and Tata Trust’s Managing Director R Venkataramanan in the Air Asia case. NCLT termed all the allegations leveled by Cyrus Mistry on Ratan Tata and Venkataramanan as “abominably baseless.”
The NCLT order finds its roots in certain sensational allegations made by Cyrus Mistry and the Shapoor Pallonji Group against Ratan Tata, Venkataramanan (akaVenkat) and other Tata Trust trustees following his unceremonious ouster as the executive chairman and director of Tata Sons in October 2016.
Mistry and SP Group had cast serious aspersions on Venkat that he, at the behest of Ratan Tata, had indulged in the diversion of funds from Air Asia India and that the money was routed through hawala. Mistry had alleged that a forensic audit by Deloitte revealed fraudulent transactions worth Rs 22 crore with non-existent parties. Venkatramanan, a director on the board of the airline, who owns 1.5% stake in the airline had found them to be “non-material”. He had later filed a criminal defamation case against Mistry for “causing irreparable damage to his reputation”.
NCLT said such scurrilous statements were made by Mistry and the petitioners “with impunity flouting all legal principles” and without producing even a “shred of paper” as evidence.
While dismissing all allegations levelled against Venkat and Ratan Tata, NCLT came down heavily on Mistry for failing to at least set up a case based on these allegations. “I can say that the petitioners miserably failed to at least set up a case basing on this allegation, all are abominably baseless allegations thrown at a reputed person/ and not knowing what consequences follow when such scurrilous allegations are not supported by any material paper.”
NCLT found that the petition was also not maintainable on the ground of “non-joinder of parties” because neither AirAsia India Pvt. Ltd, which was a joint venture with Malaysian company AirAsia Ltd, nor its management were made party to the proceedings.
“Air Asia is a joint venture with Malaysian company, AirAsia Ltd., and the management is run by AirAsia Ltd., therefore, the directors of AirAsia India Ltd. appointed on behalf of the company cannot be blamed for something happened in that company,” NCLT said.
Coming down heavily on Cyrus Mistry and petitioners for failing to provide material evidence and making the people alleged of wrongdoing a party to the case, NCLT said: “This kind of judicial dispensation which the petitioners expecting without even making the parties who allegedly done something will not happen even in village panchayats.”
Cyrus Mistry’s claims that the Air Asia deal was thrust on him as a fait accompli was also not found “conceivable” by NCLT because all investments to AirAsia were done by the company in his tenure, which couldn’t be possible without his knowledge. Also, Cyrus Mistry had even presided over a meeting in which further funding to Air Asia was agreed upon, NCLT said.
The NCLT further held, “regarding the allegation of fraudulent transaction of Rs 22 crores, no doubt, it has come out in forensic investigation conducted by Deloitte revealing that ex-CEO of AirAsia indulged in that fraud, with which none of the directors of AirAsia have been connected, whereby a fraud committed by a CEO cannot be attributed as a fraud committed by the directors of that company.”
Earlier, the CBI booked AirAsia Group chief executive Tony Fernandes and others for bribing unnamed government officials to obtain a flying permit for his joint venture airline with the Tata group. The CBI first information report (FIR) also named Venkataramanan for allegedly lobbying with the government for flight permits violating regulations around foreign airline operators from controlling Indian entities.
Venkataramanan, in a statement, had said he as a non-executive director of AirAsia India has been wrongly named as an accused by the CBI on operational matters “where I had little or no role to play”. He said accusations against him find their “root in baseless allegations” made by Mistry and the Shapoor Pallonji Group in “revenge” legal actions.