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Cyrus Mistry, the ousted chairman of Tata Sons, has suffered a setback in his legal campaign against the company after a Mumbai tribunal declined to hear his case.
Mr Mistry had brought the suit against Tata Sons following his dismissal in October, seeking the replacement of the entire board, on grounds of alleged mismanagement and oppression of minority shareholders. His family controls 18 per cent of the common stock in Tata Sons, the holding company of India’s largest conglomerate by sales.
But Mumbai’s National Company Law Tribunal on Monday refused to hear the complaint, saying that it could hear petitions only from shareholders who control at least 10 per cent of a company’s stock of all classes. When preference shares are taken into account, the Mistry family stake falls short of this threshold.
Mr Mistry had asked for the tribunal to grant a waiver of the usual requirement, saying that his case was in the public interest. His legal suit is part of a highly public campaign against his former employer and his predecessor Ratan Tata, whom he accuses of having persistently interfered in the running of the company – an accusation denied by Tata Sons on Mr Tata’s behalf. The dispute has sent shockwaves through India’s business world and tarnished the image of a company long known for stable management and governance.
FN Subedar, Tata Sons’ chief operating officer, said the company hoped the NCLT’s decision would bring to an end a “vexatious campaign” based on “ill-advised and groundless allegations”.
However, the ousted chairman has previously expressed a determination – should the NCLT refuse his demands – to take his case to the National Company Law Appellate Tribunal, and thereafter if necessary to the Supreme Court. A spokesman for Mr Mistry declined to comment.