Wanted To Ensure Tata Sons Runs As A Board-Managed Company: Mistry
The Mistry side, represented by Senior Advocate CA Sundaram, in the second half of Thursday’s hearing argued that Tata Sons was not being run as a board-managed company, and Cyrus Mistry was trying to address that which included his attempt to introduce a corporate governance document just before his removal as executive chairman of the company.
The Mistry side, Sundaram said, sought corporate governance and not let nominee directors of the trustees decide on their own. The affairs of Tata Sons, he said, have an impact on other downstream companies as well since they hold a large number of shares in the group entities.
The affairs were being run in a manner that was not prejudicial just to the minority shareholders but to the company (Tata Sons) itself, Sundaram told the three-judge bench, which also comprised Justice AS Bopanna and Justice V Ramansubramanian.
The bench asked Sundaram is the test to determine oppression of minority shareholders would be evidence of monetary loss or interference with the right of the minority to take a decision. To this, Sundaram said even actions that may lead to a loss of confidence in the manner in which the company’s affairs were being run would qualify.
Conversion To Pvt. Ltd Co. Was Done To Take Away Protections: Mistry
The Mistry side on Thursday once again questioned the conversion of Tata Sons from a public limited company to private limited.
This conversion, Sundaram told the bench, was done with intent to prejudice protection the minority shareholders would have received by virtue of being a minority shareholder. According to him, the conduct of conversion to a private limited company showed that the minority was being sidelined.
The Companies Act, 2013, further strengthened the protection granted to minority shareholders than what was granted in the earlier 1956 act, Sundaram told the bench.
During previous arguments, Salve defended the conversion, saying after the introduction of the 2013 act Tata Sons became a private limited company by definition.
The dispute between the Tata Group and the Mistry family stemmed from the sudden ouster of Mistry as chairman of Tata Sons in October 2016. Soon after, Mistry and firms controlled by the Mistry family approached the National Company Law Tribunal in Mumbai with a suit of oppression and mismanagement against Tata Sons. While the NCLT ruled in favour of the Tatas, the order was reversed by the National Company Law Appellate Tribunal. Tata Sons challenged the NCLAT ruling in the Supreme Court, where the case is pending.
The Supreme Court will continue hearing the arguments on Monday at 2 p.m. Besides Sundaram, senior advocates Shyam Divan and Jana Dwarkadas are likely to argue. For the Tatas, Salve will be followed by senior advocates Abhishek Manu Singhvi and Mohan Parasaran.
