Two Mistry family firms on Tuesday presented to the Mumbai Bench of the National Company Law Tribunal (NCLT) what they referred to as “documentary evidence” to prove “mismanagement” at Tata Sons.
The NCLT was hearing a plea by Cyrus Investments and Sterling Investments, which have been fighting Tata Sons since Cyrus Mistry’s removal as chairman of the holding firm in October 2016.
The Mistry firms’ counsel Aryama Sundaram presented to the Bench copies of emails, letters, etc to prove the charges. They related to companies including Tata Motors, Tata Teleservices, and Tata Power.
He argued the Tata Motors board in October 2016 had unanimously decided to discontinue the Nano project. The continuance of the project “for emotional reasons post the removal of Cyrus Mistry is an example of ongoing mismanagement of Tata Motors and through it of Tata Sons”.
Through his submissions, Sundaram said shares of Tata Teleservices Ltd were allotted to Mauritius-based businessman C Sivasankaran at a discounted value with benefits aggregating more than Rs 10 billion owing to his friendship with Ratan Tata, former chairman of Tata Sons.
In a Tata Sons board meeting held in September 2016, Cyrus Mistry introduced a proposal to litigate against the Siva Group to recover Rs 6.94 billion.
Agreement with this decision was unanimous, Sundaram argued.Mehli Mistry, another close associate of Ratan Tata, secured lucrative long-term contracts at the expense of Tata Power.
The documents on record capture the manner in which the interests of Tata Sons were compromised through awards of long-term lucrative contracts not conforming to industry standards, he added, pointing out that several such deals were awarded despite Mehli Mistry not having any experience in the field concerned.
The benefits accruing to Mehli Mistry fell by more than half when the contracts were re-negotiated, resulting in a saving of more than Rs 2 billion per annum for Tata Power, he argued.
Source: Business-Standard