Cyrus Investments, the investment firm of Shapoorji Pallonji (SP) Group, on Wednesday urged for a board representation in Tata Sons, where it holds an 18% stake. The SP lost its board position in the aftermath of Cyrus Mistry’s removal as Tata Sons chairman in October 2016.
Pleading its case in the National Company Law Appellate Tribunal (NCLAT), where the SP Group has challenged Mistry’s ouster, it also urged for modification in Tata Sons’ Articles of Association, particularly Article 75, which empowers it to ask minority shareholders to transfer their shares. The two-member NCLAT bench, headed by chairperson Justice SJ Mukhopadhaya, asked the Cyrus firm to suggest proposed changes within two weeks and posted the matter for further hearing on a day-to-day basis from December 11 onwards. The bench observed that the two groups cannot co-exist in Tata Sons without maintaining good relationship.

On August 24, the NCLAT had provided Mistry partial relief by restraining Tata Sons from forcing him out of the company as a shareholder till the appellate tribunal heard the merits of his petition challenging the ouster.
Senior advocate CA Sundaram, appearing on behalf of Cyrus Investments, on Wednesday said Tata Sons should not be allowed to function as a private limited company which limits the role of independent directors. He also urged the bench to ensure that cases of oppression and mismanagement do not recur in future.

Sundaram said Tata Sons is a two-group company comprising Tata Group (the Tata Trusts, the Tata family and the Tata Group companies) and the SP Group.
The relationship between the two groups though not formally reflected in the Articles of Association is evidently based on the mutual trust and confidence which has given rise to legitimate expectation of being treated in a mutually just, honest and fair manner. The mutual trust and confidence have broken down on account of the conduct of Tata Sons,” he said.

The SP Group entered the Tata Group as business partners based on personal relationship that had existed between the two families, both in business and otherwise. The relationship was not purely on commercial considerations, but because of factors outside of pure economic factors. The business relationship between the two groups as shareholder of Tata Sons is a culmination of pre-existing relationship between SP Group and the Tata family over the last 50 years.