Tata Sons has questioned the very basis of a petition accusing it of mismanagement and called it a “ruse” by its recently ousted chairman Cyrus Mistry to “publicly air his displeasure at the loss of his office.” Business decisions taken over a decade ago, some even two decades ago, also those which have Mistry’s “express consent” are being raised as “so-called issues and concerns” by two of his family owned companies making it apparent that “it is yet another attempt to besmirch the reputation of Tata Group,” with “no credible material to establish any oppression or mismanagement,” said the holding company.
Cyrus Investments and Sterling Properties Investments Pvt Ltd had moved the National Company Law Tribunal (NCLT) last month demanding that the Tata Sons board be superseded. They cited legal provisions to seek action for oppression of their rights as minority shareholders and against mismanagement by the corporate behemoth. Responding to the Tribunal’s orders to file its reply, the company founded by Jamsetji N Tata in 1868 filed a 210-page reply to first say that the plea is “wholly misconceived”, “frivolous and… not bona fide”, both on facts and law and “is primarily filed to espouse the cause of Mistry their alter-ego.”
Allowing the petition would “strangle the functioning of Tata Sons Ltd virtually bringing the affairs to a standstill,” said reply. Seeking dismissal with ‘exemplary costs”, Tata Sons Limited said, “by seeking such ill-adviced and drastic reliefs, in guise of public interest, they are unlawfully wanting to displace the control of majority shareholders and enforce their say.”
“Concluded transactions” being cited cannot constitute oppression of shareholders, said Tata Sons claiming that no case of any wrong doing is made out in the petitions.The reply delves into the background of the company and points out that “65.3 % of Tata Sons’ share capital is held by philanthropic trusts…” It points out Pallonji Shapoorji Mistry who represented the petitioning companies “voted in favour” of new version of Articles of Association in September 2000, including the same four articles that they now want “struck off in their entirety.”