Former Tata Sons chairman Cyrus Mistry, who had sweet revenge after a company law court delivered a verdict against his unceremonious ouster three years ago, is unlikely to rejoin the salt-to-software conglomerate.
Last week the National Company Law Appellate Tribunal reinstated Mistry as chairman of Tata Sons and three other group companies.
But Mistry is unlikely to take up a board position at any Tata companies, the Business Standard reported, quoting sources. He has only five months left of his tenure as chairman of Tata Sons and might appoint nominee directors to ensure best practices of corporate governance at Tata group companies, the daily added.
While ordering Mistry’s reinstatement, the appellate tribunal also ruled that the appointment of N Chandrasekaran as the head of holding company Tata Sons was illegal.
It also quashed the conversion of Tata Sons – the principal holding company and promoter of Tata firms – into a private company from a public firm and termed it as “illegal.”
The tribunal has given Tata a month to implement the order and the latter is expected to challenge it in the Supreme Court.
Mistry, a scion of the wealthy Shapoorji Pallonji family, was removed as Chairman of Tata Sons in October 2016 in a boardroom coup. He was the sixth chairman of Tata Sons and had taken over in 2012 after Ratan Tata. He was later also removed as director of the Tata Sons board.
Mistry and Ratan Tata reportedly had a difference of opinion over key investment decisions, including manufacturing of the world’s cheapest car, the Nano. Despite the low cost, car buyers in India did not warm to this small car and sales remained lackluster.
The company has not rolled out a single car in the first nine months of this year, but it is yet to officially announce its closure. Tata Motors has admitted that in its current form the Tata Nano is unlikely to fulfill the forthcoming emission norms – the Bharat Stage VI, which is expected to be more stringent than the current one.
Mistry was appointed after a long, drawn-out selection process. When he took over he was 44, the youngest to occupy the corner office of Bombay House, the headquarters of Tata group.
Mistry has been fighting against his removal in the National Company Law Tribunal. In July last year, the tribunal rejected Mistry’s petition to reinstate him and found no merit in his allegations of operational mismanagement and the oppression of minority shareholders.
The National Company Law Appellate Tribunal had reserved its judgment after the completion of arguments from both sides in July this year and last week it passed the verdict in Mistry’s favor.
Mistry is the younger son of billionaire Shapoorji Pallonji Mistry. His brother Shapoor Mistry runs Eureka Forbes. The family is one of the largest shareholders of Tata Sons with its estimated 18.4% equity.
Tata Sons Private Limited is the principal holding company of the Tata group and is the majority shareholder and promoter of most Tata group companies including Tata Motors, Tata Steel and Titan. Philanthropic trusts, the two primary ones being Sir Dorabji Tata Trust and Sir Ratan Tata Trust, hold 66% of the equity share capital of Tata Sons.
In a related development, the Indian government has approached the appellate tribunal seeking a modification in its order in the Tata Sons matter. The Registrar of Companies has requested the appellate tribunal to remove the word “illegal” with respect to the conversion of Tata Sons from a public company to a private company.
The National Company Law Appellate Tribunal will hear the matter on January 2.
In its petition, the registrar said the conduct of its Mumbai branch was not illegal and was done according to the provisions of the Companies Act along with the rules.