The ouster of Cyrus Mistry from Tata Sons in 2016 was pre-meditated, lacked probity and was an ambush by Tata Trusts, SP Group’s counsel said in his argument before the Supreme Court on Thursday.
The Supreme Court reserved its verdict on the cross appeals filed by Tata Sons and Cyrus Investments Pvt Ltd against the NCLAT order which had restored Mistry as the Executive Chairman of Tata Sons.
Senior Advocate Shyam Divan said a board meeting on October 24, 2016, was the principal reason for the removal of Mistry. It was the first meeting attended by Ratan Tata post his retirement as Director, in December 2012.
The agenda of the meeting included a note on improving corporate governance, a discussion of recovery of dues from entrepreneur C Sivasankaran and tabling of the findings of a forensic audit by Deloitte on the fraud at AirAsia. However, a “new agenda” was proposed by the nominees of the majority shareholders, he said.
Divan also argued that the removal of Mistry without any agenda item was a breach of Articles 118 and 105 of Tata Sons’ Articles of Association (AoA).
A committee was required to be formed to recommend the removal of an incumbent Executive Chairman under Tata Sons’ AoA, he pointed out.
Tata Sons was represented by Senior Counsel Harish Salve, who accused SP Group of “peddling fiction” by citing a “quasi partnership” in Tata Sons.
No partnership: Tatas
Tata Group has all along denied that Tata Sons is a partnership between the Tatas and the Mistrys. The Mistrys are investors and they have got huge returns. They don’t have any special rights under the company’s articles, Salve added.
With both the sides concluding their arguments, the apex court gave one week to the parties to file written notes. It is slated to give its verdict in January, when it meets after the winter recess, which starts from tomorrow.