The Mistry side cited reasons why it believes that Tata Sons Ltd. was not being run as a board-managed company as the Supreme Court continued hearing the dispute stemming from Mistry’s ouster from Tata Group’s parent.

Senior Advocate CA Sundaram, representing Mistry, told the bench on Monday that directors of Tata Trusts on the board of Tata Sons were made aware of all the decisions but Ratan Tata insisted on being personally consulted. The Mistry side cited this as “interference”.

Citing Tata’s transaction with Uber, the rights issue of Tata Motors Ltd., among others, the Mistry side argued that Tata Sons’ board was being undermined in taking decisions which resulted in the oppression of minority shareholders.

During the hearing, the Chief Justice of India observed that in companies of such nature, the one who started the company or the head of the family does exercise such rights. To this, Sundaram replied that it is not their case that the head of the family cannot be informed. But when they claim they have the absolute right to run the company is a problem, he said.

Earlier, the Mistry side had argued that Cyrus Mistry had sought corporate governance by not letting nominee directors of the trustees decide on their own. The affairs of Tata Sons, Sundaram had said, have an impact on other downstream companies as well since they hold a large number of shares in the group entities.

Senior Advocate Harish Salve earlier had defended the right of the trustees to be informed in advance of developments in the company, arguing they were well within their rights and that advance discussion help in the smooth functioning of the company.

The two Tata Trusts control around 68% of the shares of Tata Sons, while the Mistry family owns around 18%. Going strictly by numbers, the Mistry side would not even get a representation on the board, Salve had argued on the first day of the hearing.

Tata Sons maintained that only lack of probity in the decision-making can be an important factor in determining whether there was the oppression of the minority shareholder and that wasn’t the case in this instance.



Source link

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *