The National Company Law Appellate Tribunal (NCLAT) on Wednesday ordered the restoration of Cyrus Mistry as the Executive Chairman of Tata Sons. This happened three years after he was let go from the company.
According to reports, NCLAT has also ruled out the appointment of N Chandrasekaran as the Executive Chairman and called it illegal. It had also cited Ratan Tata’s action against the Mistry family as oppressive.
However, with respect to reinstatement of the order, NCLAT has put a stay on the operation for four weeks to allow Tatas to appeal. It has also quashed the conversion of Tatas into a private company from that of a public company and has set aside an order from the lower court.
The Mistry family is the largest shareholder in Tata Sons with an 18.4 per cent stake and had challenged Cyrus’s removal in the NCLT. They had filed a case of mismanagement against Tata Sons and 20 others, including Ratan Tata.
Both Mistry and Tata families reportedly had a falling out over key investment decisions like manufacturing of the world’s cheapest car Nano.
However, in March 2017 NCLT (National Company Law Tribunal) had dismissed the ruling that they were not eligible to pursue the allegations. The NCLT bench had said that Mistry was ousted as chairman because the Tata Sons’ Board and its majority shareholders had “lost confidence in him” and were’competent’ enough to remove the executive chairperson of the company.
After this, Mistry had approached the NCLAT against the NCLT order.