Chronology of events in Tata-Mistry fight before NCLT, NCLAT







Autoplay Autoplay 1 of 16 Mistry back as Tata Sons chief The NCLAT ordered the restoration of Cyrus Mistry as the Chairman of Tata Group. The following is the chronology of the developments that took place in the Tata-Mistry case before the National Company Law Appellate Tribunal (NCLAT) and Mumbai-bench of National Company Law Tribunal (NCLT). October 24, 2016 Cyrus Mistry ousted as Tata Sons chairman, Ratan Tata named as an interim Chairman of the group. December 20, 2016 Two Mistry family backed investment firms, Cyrus Investments Pvt Ltd and Sterling Investments Corporation Pvt Ltd, move the NCLT Mumbai, alleging oppression of minority shareholders and mismanagement by Tata Sons. They also challenged Mistry's removal. January 12, 2017 Tata Sons names N Chandrashekaran as Chairman, the then TCS Chief Executive Officer and Managing Director. February 6, 2017 Mistry removed as a director on the board of Tata Sons, holding company of Tata group firms.

The National Company Law Appellate Tribunal has put Cyrus Mistry one up in corporate India’s most dramatic battle. The tribunal in a ruling on Wednesday said his dismissal as the chairman of Tata Sons was illegal, restoring him to his original position and terming the appointment of N Chandrasekaran as illegal.The Tatas have time to appeal in a fight, the genesis of which comes from issues as diverse as the proper way for Tatas to do poll funding to whether the group should tie up with an American fast food chain.The piece includes excerpts from Tata Trustee Vijay Singh, who reportedly chaired the Tata Sons board meeting that ousted Cyrus Mistry, to other Tata Sons board members as well as to senior personnel close to Mistry who chose to remain anonymous.Poll funding was one of the earliest issues that saw Ratan Tata express his dissatisfaction over Mistry and his team. A close Mistry advisor had proposed Rs 10 crore funding for Odisha assembly elections in middle-2014. The logic given was that Tatas had big iron ore deposits in the state. But Ratan Tata’s nominees in the Tata Sons board argued against the idea, citing the long practice of Tatas only contributing to parliamentary polls, and that too through a trust. The proposal didn’t pass. But Ratan Tata, a board member said, was unhappy that such a proposal was even mooted. And Mistry, he said, was informed that such plans were not in consonance with the group’s reputation.“Our main concern was that the highest ethical standards of governance should be maintained, for example in the matter of funding of elections through electoral trusts…,” Vijay Singh told ET in this story.People close to Mistry had a different version. A person close to Mistry told ET: “There was a discussion. After discussion, it was decided that any contribution for state elections was to be left to respective Tata companies. These companies may choose to do so, but again within the principles applied to the Electoral Trust, that was rule based, transparent and had full disclosure.”Aboard member said Ratan Tata was “dismayed” when the Tata group made two bids for a prestigious army contract earlier this year — the Rs 60,000 crore contract for 2,600 Future Infantry Combat Vehicles.Tata Power Strategic Equipment Division (SED), in a joint venture with Titagarh Wagons, and Tata Motors in a JV with Bharat Forge, made two separate bids. The board member who spoke to ET said Ratan Tata thought a unified bid would have been in keeping with the group’s image and that two bids “made Tatas a laughing stock”. The winner for this contract hasn’t been decided as yet.Tata had suggested through interlocutors that Tata Motors, which has the expertise, should combine with SED. He also felt Mistry should lean on the two entities to resolve any differences.Mistry’s aides, however, believe that such suggestions amounted to “interference”. One person speaking for Mistry said: “Cyrus did his role in convening them to get to a situation that could be potentially win-win for both. Cyrus respects the independence of each group company board and shareholders and would not do something to favour one over other”.The board member told ET that as chairman of Tata Sons, Mistry should have ensured synergy between group companies. “Cyrus agreed, which is why he tried, but he failed,” he said.The disputes over the Tata-Welspun deal was centered around a little-known fight over fine print. Ratan Tata’s argument was that Cyrus Mistry’s refusal to bring the Tata Power-Welspun deal before the Tata Sons board amounted to a breach of the articles of association, because the deal size was large enough to merit the holding company’s approval. The Tata Power’s board meeting on the deal saw Tata Sons representatives arguing that “the fact of a breach of the articles of association” should be put on record. Mistry reportedly said the word “breach” has legal connotations and could not be used. Ratan Tata was consulted by Tata Sons’ representatives and “breach” was substituted with “not in accordance with”. However, said the board member quoted earlier, in the final minutes there was no reference to this. Ratan Tata was upset, the board member said, and the company secretary again amended the minutes. “The whole thing left a bitter taste,” this member said. Mistry’s aides told ET: “Ratan Tata may have conveniently forgotten that the Welspun deal details were with him for over 10 days as he went about travelling the world. Due process was followed and the Tata Power board was unanimous in its approval...Tata Sons board was informed of the Welspun deal before it was announced in the press.”Singh said the question was not about the deal, but about “due processes in line with group rules”. “At no stage was the approval of Mr Tata or the board of Tata Sons sought. The communication sent by the Company Secretary of Tata Sons was not a board circular or resolution, which required approval and was merely something sent for information after the deal had been sealed,” Singh told ET.A proposal for a fast food tie-up really spiced up the Tata-Mistry battle. Tata Sons board was presented with a proposal of a tie-up with US pizza chain Little Caesars.“He (Ratan Tata) was disillusioned that something like this was being brought before the Tata Sons board. There were other Tata entities which could deal with this kind of stuff. He felt this was just pulling down the image of the group,” a board member told ET.Mistry’s aides say since Tatas tied up with a coffee chain (Starbucks), there was nothing wrong with this idea. “During our strategy discussion with the Tata Sons Board in June 2016, it was proposed we explore QSR (quick service restaurants) as a possible growth opportunity. This was done considering our success with Starbucks… As we were approached by a major player in the US to partner in a venture, we took the Board’s permission only to explore this opportunity,” a person close to Mistry said.Tata’s aides say coffee chain Starbucks was a different proposition since group entities like Tata Global Beverages and Tata Coffee meant that the group had a large presence already in this area. “Pizza is a completely different business”, the board member said.The board member said all these issues added up to a “worrying picture” and that Ratan Tata also felt discomfited by Mistry’s approach to widely different subjects, managing Tata factory workers and managing relations with Japan Inc.Ratan Tata, his aides say, had no problems with Mistry’s decisions on Nano or Tata-Corus. Tata’s issue was that Chairman Mistry “must go to factories and face workers, try to address their issues and not deal with it from Mumbai. He felt this was not the Tata way, a conglomerate where employees have a very strong emotional connect with the brand,” the board member said.On the Tata-Docomo dispute, Ratan Tata felt the group’s credibility was at stake. He was keen to honour the deal with Docomo and got Mistry to deposit Rs 8,000 crore with the Delhi High Court. The board member said Tata had to intervene after some of Japan Inc’s biggest names complained to him that this issue was not going down well in Japan.Mistry’s aides told ET he wanted be legally correct. “The RBI stance this week has clearly indicated that irresponsible solutions that Ratan Tata seems to be suggesting would have been illegal under Indian law. Cyrus was committed to finding a solution,” an aide said.Tata confidants said Mistry should have proactively worked with the government to find a solution. “But generally it appeared there was no push on Mistry’s part,” the board member added.All this, plus what the member said was Tata’s concern about Mistry’s emphasis on real estate deals, an area the Tata group had no expertise in, and a sense that Team Mistry “simply wanted Ratan Tata to fade away” finally tilted the scales for the decision to oust Mistry.