Cyrus moves court, wants Tata Sons board sacked
Alternatively, he wants the tribunal to appoint a retired Supreme Court judge as chairman of Tata Sons and a large number of independent directors so that the existing directors on the company’s board are rendered a minority.
The 50-year-old Mistry submitted the petition against the Tata Sons board and Tata trustees under sections 241, 242 and 244 of the Companies Act, which deal with mismanagement of companies and oppression of minority shareholders. With a stake of 18.5%, Mistry’s family has been a minority shareholder in Tata Sons for the past 50 years. The case is scheduled to come up before the tribunal on Thursday.
Mistry wants the court to order an investigation into securities law violations by Tata and Noshir Soonawala, a trustee, for procuring unpublished price sensitive information from listed Tata companies. In the petition, Mistry said that Tata and other trustees, acting as shadow directors, have been controlling Tata Sons as a super-board with trustee-nominated directors accustomed to act under the instructions of Tata Trusts, which hold 66% in Tata Sons.
Mistry asked that the court appoint a forensic auditor to investigate business transactions between Tata companies and C Sivasankaran and Mehli Mistry, who are alleged to have benefited from their close association with the group when it was headed by Tata. After he was sacked as chairman of Tata Sons on October 24, Mistry had alleged that Sivasankaran took large loans from some group companies which he didn’t repay and which were subsequently written off by those entities. Days before he was sacked, Mistry was planning to take Sivasankaran to court to recover the dues.
Mistry also wants a forensic auditor to re-investigate the transactions executed by Air Asia India (in which Tata Sons holds a significant stake) with entities in India and Singapore to ascertain whether any proceeds have been diverted to R Venkatraman, the managing trustee of Tata Trusts.
Mistry prayed to the court to bar Tata and Soonawala from all affairs of Tata Sons. In addition, to safeguard the interests of the Mistry family, he requested the court to restrain the holding company from issuing any fresh shares or changing its articles of association.
Mistry has filed the petition through two of his family-owned companies—Cyrus Investments and Sterling Investment Corp. The scion of Shapoorji Pallonji Group prayed that he shouldn’t be removed from the board of Tata Sons, on which he has been a director since 2006. He has sought a restraining order on the recently appointed five-member committee to select the next chairman of Tata Sons.