Cyrus Mistry Equally To Blame In ‘Mismanagement’, Says Tata Sons

Ratan Tata and Cyrus Mistry.

(Photo: IANS)

Tata Sons Ltd on Thursday said Cyrus Mistry during his time as a Tata Sons Ltd board member was party to almost all decisions that he now alleges amounted to mismanagement, and not a word of protest came from him till he was removed.

Abhishek Manu Singhvi, representing Tata Group’s holding company, continued his arguments on Thursday in the petition filed by two Mistry family firms alleging oppression of minority shareholders and mismanagement of affairs at Tata Sons.

The National Company Law Tribunal began hearing the petition in November after the appellate tribunal granted the Mistry firms waiver from the 10 percent shareholding requirement to pursue oppression and mismanagement charges against Tata Sons.

Tata Sons started its arguments last week after the tribunal heard the Mistry side. Here is what Singhvi argued on Thursday:

• Mistry firms had alleged that Mehli Mistry, a close associate of Ratan Tata, unjustly made significant profits at the cost of Tata Power. Singhvi said all the contracts awarded to him were approved by the board of Tata Power when Cyrus Mistry was the chairman. Singhvi argued that the contracts were awarded through competitive and in accordance with due process, as has been confirmed by an independent auditor.
• The two Mistry firms’ counsel had pointed to alleged fraud worth Rs 22 crore involving AirAsia India as a ground for mismanagement. They accused R Venkatraman, a trustee of the Tata Trust, of having a role in it. Singhvi admitted that the fraud did take place but by Mittu Chandilya, former managing director and chief executive officer of Air Asia. He argued Tata Sons initiated investigation in March 2016 and by 9 November had filed a criminal complaint against Chandilya. If the company and its management is guilty of mismanagement, then Cyrus Mistry, being a part of the management, should be considered a co-conspirator, he argued.

• NCLT schooled Mistry’s lawyers on fundamentals of legal pleading over their argument that Rs 22 crore worth of fraudulent transactions, taken up by Tata Sons at the behest of Ratan Tata, involved financing a global terrorist Hamid Reza. Singhvi argued that these allegations are completely baseless and there is no documentation that can support such a claim. This claim alone will cast doubt on the veracity of all other claims, he said. Every other allegation should be taken with a bucket of salt, he argued.
• Singhvi reiterated that the instances of mismanagement that involve other Tata entities cannot be entertained by the NCLT when these companies have not been made party to the present suit.

Tata Group’s arguments will continue on Friday.

(This article has been published in an arrangement with the Bloomberg Quint.)

(We Indians have much to talk about these days. But what would you tell India if you had the chance? Pick up the phone and write or record your Letter To India. Don’t be silent, tell her how you feel. Mail us your letter at [e-mail]. We’ll make sure India gets your message.)