Tata Sons Ltd has filed caveats in the Supreme Court and the National Company Law Tribunal (NCLT) against sacked chairman Cyrus Mistry, as the boardroom battle at India’s largest corporate conglomerate appears to be taking a legal turn.
The preventive action by the holding company of the steel-to-software Tata Group comes a day after its board ousted Mistry, 48, from the chairman’s post and named his 78-year-old predecessor Ratan Tata as the interim chief.
A caveat is a notice filed by a party fearing legal action, which prays to the tribunal or court that certain actions may not be taken without being informed.
The caveats filed by Tata Sons also include the names of Sir Dorabji Tata Trust—one of its shareholders—and Ratan Tata, people familiar with the development said. The company is contemplating a similar move in the Bombay High Court, the people said. However, the Press Trust of India reported that Tata Sons has already filed a caveat in the high court.
Mistry, however, has yet to take any action. “Tatas have filed caveats seeking notice from Cyrus Mistry fearing legal action,” a statement issued by Cyrus Mistry’s office said. “Cyrus has not filed any caveats. He has already made a statement that such concerns are misplaced at this stage.”
Mistry is the younger son of the billionaire Pallonji Mistry, whose construction firm Shapoorji Pallonji & Co. is the largest shareholder of Tata Sons with a stake of about 18%. Mistry was named as the chief of Tata Group in November 2011 and had taken over formally as chairman of Tata Sons in December 2012 after Ratan Tata retired when he turned 75 years old.
The Shapoorji Pallonji Group said in a separate statement that neither the group nor Mistry have made any comment yet. “While the circumstances are being studied, there is no basis to media speculation about litigation at this stage. As and when a public statement becomes necessary, it would be made.”
According to people familiar with the matter, New Delhi-based law firm Raian Karanjawala & Co and Shardul Amarchand Mangaldas are advising the Tatas in the dispute. The Shapoorji Pallonji Group has hired Mumbai-based law firm Desai & Diwanji and senior counsels Janak Dwarkadas and Iqbal Chagla for advice on the matter, the people said. Chagla is also Mistry’s father-in-law.
“This seems to be the beginning of a long-drawn legal battle between the parties, who are equally mighty,” said a senior partner at a law firm who is advising one of the parties in the dispute. “However, we are still figuring out a way that may lead to a dignified and amicable solution.”
Meanwhile, Ratan Tata told top executives of group companies that they must focus on their market position vis-à-vis competition, and not compare themselves to their own past. “The drive must be on leadership rather than to follow,” he said, according to a statement issued by Tata Sons. He also asked the leadership of the companies to focus on their respective businesses, without being concerned about changes in the group leadership.
Tata reiterated that he had assumed the role of the interim chairman for stability and continuity. “This will be for a short time. A new permanent leadership will be in place,” he said.
In a related development, Tata Sons on Tuesday appointed Jaguar Land Rover CEO Ralf Speth and Tata Consultancy Services CEO and managing director N Chandrasekaran as directors on its board. The board now has 12 directors.
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With PTI inputs