A day after Cyrus Mistry was unceremoniously dismissed by the Tata Sons board as the company’s chairman, it appeared the boardroom tussle might just spill over to the courts. On Tuesday, Tata Sons and Tata Trusts, among others, filed caveats in the Bombay High Court and the National Company Law Tribunal, asking that they should be heard before grant of any relief to the ousted chairman.
In a separate development, the Tata Sons board was expanded to 11 members, accommodating Tata Consultancy Services managing director and CEO N Chandrasekaran and Ralf Speth, CEO, Jaguar Land Rover.
Counsel for the Tatas Abhishek Manu Singhvi attempted to play down the filing of the caveats, saying on a television channel that it was just a notice filed by a party fearing legal action and meant nothing.
Mistry’s office said he had not filed any caveats, reiterating that such concerns were misplaced at this stage. “Tatas have filed caveats seeking notice from Cyrus Mistry fearing legal action. Cyrus has not filed any caveats,” a statement said.
Still, the Shapoorji Pallonji Group, which owns an 18.5% stake in Tata Sons, is understood to have roped in the services of Mumbai-based lawyers Desai & Diwanji.
Senior lawyers Darius Khambatta and Iqbal Chagla, the latter Mistry’s father-in-law, may represent the sacked chairman, sources added, though this could not be independently verified by FE.
Meanwhile, former and incoming chairman Ratan Tata on Tuesday interacted with the CEOs of some group companies in a meeting that lasted just under 30 minutes. The reasons for Mistry’s dismissal were not discussed, sources said. Bloomberg reported that Tata said the group would honour all commitments made by Mistry, quoting a a person with direct knowledge of the matter.
A statement from Tata Sons said Ratan Tata had asked group companies to act as leaders and enhance returns to shareholders. In an indication that not all current strategies may be pursued, Tata said ongoing initiatives would be evaluated and those that were “required” would be continued with. “If there is any change, they will be discussed with you,” Tata said. “The companies 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, addressing managing directors and senior leaders of Tata companies.
The sudden replacement of the 48-year-old Mistry on Monday would hurt the Tata group’s reputation, analysts and corporate watchers believe, pointing out that better corporate governance practices could have prevailed. Any change at the top was bound to create anxieties for group CEOs, they observed. However, others noted that given the stature of most Tata Group companies, which are giants in their own right, once a new leader was in place, it would be business as usual.