Ousted Chairman of Tata Sons Cyrus Mistry will not pursue the executive chairmanship of the corporate group, or directorship of other Tata firms despite the National Company Law Appellate Tribunal (NCLAT) order in his favour.
In a statement issued late on Sunday, Mr. Mistry said, “I intend to make it clear that despite the NCLAT order in my favour, I will not be pursuing the executive chairmanship of Tata Sons, or directorship of TCS, Tata Teleservices or Tata Industries. I will, however, vigorously pursue all options to protect our rights as a minority shareholder, including that of resuming the 30-year history of a seat at the Board of Tata Sons of TCS, Tata Teleservices or Tata Industries.”
In Group’s interest
The statement added that the decision was made in the interests of the Tata Group, whose interests are far more important than the interests of any individual, and to dispel the misinformation campaign being waged.
Recent media reports attributed to Mr. Ratan Tata and others questioning the NCLAT judgment ahead of hearing in the Supreme Court, profess an interpretation of “corporate democracy as being one of brute majoritarianism with no rights for minority stakeholders,” said the statement. It added that the question in these legal proceedings is whether the oppressive actions of a majority, that stifles minority shareholders, is beyond reproach and outside judicial oversight.
Protecting minority rights
The statement said, globally, and in India, “Company Law has evolved to protect the rights of minority shareholders and strengthen corporate governance. The Companies Act 2013, has considerably strengthened the statutory protections accorded to minority shareholders from oppressive conduct of the majority shareholders.”
Mr. Mistry stressed that for “corporate democracy” to be strengthened, all stakeholders must operate within the ambit of law and statutorily enshrined protections.
According to the statement, the founding fathers of the Tata Group had laid a strong ethical foundation that cared for all stakeholders. It pointed out that the relationship between the Tata Group and the Shapoorji Pallonji Group spanned several decades and was built on common agreement and mutual faith. Former Tata leaders had worked together with the minority partner to create value for all stakeholders.
“In the last three years, both in conduct and in their statements to the world at large, the Tata Group’s leadership has shown scant respect for the rights of minority shareholders. It is time the Group’s management introspects and reflects on its conduct as it embarks on future actions,” said the statement.
Mr. Mistry said he was “humbled by the NCLAT order” which had recognised the illegal manner in which he had been removed and the “oppressive and prejudicial conduct of Mr. Tata and other Trustees”.
“As an 18.37% shareholder, it is in our own interest to ensure the Group’s long-term success. My family, although a minority partner, has been a guardian of the Tata Group for over five decades. This legal fight has never been about me,” Mr. Mistry said. The former chairman of the corporate group said the fight had always been and will always be about protecting the rights of minority shareholders and upholding their right to demand a higher standard of corporate governance from controlling shareholders.