Business

Watch | Cyrus Mistry Reinstated as Executive Chairman, What Happens Next?

Why did the NCLAT rule in favour of Cyrus Mistry?

In October 2016, the board of Tata Sons removed Mistry, and tagged N Chandrasekaran, an old Tata hand, as the new chairman.
Directors pointed to several reasons for the boot – a “trust deficit” and a tenure that saw “repeated departures” from the group’s culture and ethos. In fact, Mistry was also accused of seeking to take control of the group’s main operating companies. The fight was out in the open and the Pallonji family made it clear, they were not going to take this tamely.

By December that year, Mistry moved the NCLT or The National Company Law Tribunal. His appeal said that he was unfairly blamed for five unprofitable businesses. He also accused Ratan Tata of constant interference that left him a “lame duck” chairman. His main argument was also around the way the group was run. The appeals panel has now ruled that 51-year-old Mistry was improperly ousted from his position in 2016 and the actions of his predecessor, Ratan Tata, had been “oppressive.”

It also ordered for Mistry’s reinstatement. It also said that turning Tata Sons into a private company was unlawful and ordered a reversal. Not just that, the NCLAT also said the appointment of N Chandrasekaran, the current chairman of Tata Sons was “illegal” and gave four weeks to implement its order. Mitali Mukherjee explains what happens next and why the NCLAT ruled in favour of Cyrus Mistry.