Mistry was removed as the chairman of Tata Sons on 24 October 2016.
Since his removal, the two sides have been locked in a bitter legal warfare. In December 2016, Mistry family’s investment firms filed a petition at the NCLT against alleging mismanagement and oppression at Tata Sons.
Singhvi argued that Tata Sons since 1917 has contained in its Articles, features of a private company and it was only in 1975 due to a change of law, that Tata Sons became a “deemed public company”. To substantiate his points, Singhvi cited instance of Supreme Court rulings which have upheld the validity of such transfer restrictions in such deemed public companies.
The Court took note of the fact that Article 75 which deals with compulsory acquisition of shares was contained in the Articles since 1917 and certainly when the Shapoorji Pallonji Group purchased the shares of Tata Sons. He said having not objected to such Articles for decades, and given the law has always upheld such provisions, it was strongly urged that certainly there could not be any oppression.
Tata Sons’ counsel on Tuesday in his arguments said the conversion of Tata Sons from a Limited company to a Private Limited company cannot be considered as an act of oppression. Abhishek Manu Singhvi, Tata’s counsel also refuted allegations that Ratan Tata interfered in the affairs of Tata Sons. On contrary, it was Cyrus Mistry who sought guidance from the chairman from time to time on range of issues, Singhvi told the National Company Law Tribunal (NCLT) in Mumbai, which concluded the hearing on Tuesday.
Singhvi said that with the amendment of 2013 to the Companies Act, Tata Sons wanted to end any ambiguity to its characterization and hence started the process to be known as only a Private Limited company. He alleged that Cyrus Mistry did not start with the amendment despite being at the helm of the company from 2013 to 2016 as the amendment would hurt his and his family’s shareholding in the company.
Singhvi also presented to the bench a letter written by Cyrus Mistry’s father in 2003 to prove that SP Group acquired shares in Tata Sons, directly or indirectly only in 1965 and not since 1928 as being claimed by Mistry’s counsel.
Source: Business-Standard