Table of Contents
The News
The Issue
- 2012 – Cyrus Mistry Chosen as chairman of Tata Group
- 2016 – Mistry removed via no Confidence motion citing mismanagement
- December 2016 – Cyrus Mistry-family backed investment firms – Cyrus Investments Pvt Ltd and Sterling Investments Corporation Pvt Ltd – move NCLT Mumbai, alleging oppression of minority shareholders and mismanagement by Tata Sons. They also challenged Cyrus Mistry’s removal. (Sections 241 and 242 of the Companies Act 2013)
- 2017 – N Chandrasekaran made Chairman in Feb 2017. (Recently, his tenure has been extended for another 5 years)
The Issue
- April 2017: NCLT Mumbai rejected the plea by the two investment firms of Mistry.
- NCLT held that they didn’t meet the criteria of 10 per cent ownership in a company for the filing of a case of alleged oppression of minority shareholders under the Companies Act.
- April 2017: Mistry challenges in NCLAT
- December 2019: NCLAT restores Mistry as executive chairman of Tata Sons, but suspended its implementation for four weeks in order to provide time for Tatas to appeal.
The Issue
- January 2020: Tata Sons, challenge NCLAT decision before Supreme Court. Supreme Court stays NCLAT decision.
- March 2021: Supreme Court delivers its verdict, allows Tata Group’s appeals and sets aside NCLAT order restoring Cyrus Mistry as executive chairman of the Group.
The News
- Recently, Supreme Court dismissed the review petition filed by Shapoorji Pallonji Group (“SP Group”) challenging the order dated 26.03.2021 wherein the Apex Court allowed Tata Son’s appeal against the NCLAT order to reinstate the ousted Chairman Cyrus Mistry.
- The review petitions were on behalf of SPG companies Cyrus Investments Pvt. Ltd. and Sterling Investments Pvt. Ltd.
- The Court however agreed to expunge certain adverse remarks against Cyrus Mistry from the judgment.
Does the Judgment hamper Minority Shareholders?
- According to companies act 2013, there is no statutory provision which gives minority shareholders or small shareholders the “right to claim proportionate representation on the board”.
- However, many private companies have enabling provisions in their bylaws to give representation to minority shareholders.
- The judgment does not directly impact the right of minority shareholders as they are free to have a contract with the majority shareholders or the promoters for their adequate representation.
Are there any avenues left?
Latest Burning Issues | Free PDF
WhatsApp