The Mumbai bench of the National Company Law Tribunal (NCLT) on Monday dismissed a petition by Cyrus Mistry and his family firms alleging that serial entrepreneur C Sivasankaran was allotted shares of Tata Teleservices at a discount as part of favours extended to him by Tata Sons.
Cyrus Mistry, Sivasankaran, National Company Law Tribunal, TTSL, NTT DoCoMo, Tata Sons family firms alleging that serial entrepreneur C Sivasankaran was allotted shares of Tata Teleservices at a discount as part of favours extended to him by Tata Sons. A bench of the tribunal headed by Justice BSV Prakash Kumar and Justice V Nallasenapathy said it did not find any merit in the purported legacy issues such as the Sivasankaran issue, Tata Teleservices (TTSL) issue and others to state that those issues fall within the ambit of Sections 241 and 242 of the Companies Act 2013. In their arguments, Mistry’s counsels had told the bench that the largesse given to Sivasankaran aggregated over `1,000 crore of benefits and ranged from management contracts for procurement services, which were not in conformity with industry standard, and shares being allotted at a huge discount.
“Even the subscription being funded by R-1’subsidiary and another Tata Group Company; procuring purchase of Siva’s shares by NTT Docomo with an assurance of a put option as if Siva were a Tata Company, and the like,” the affidavit filed in the NCLT read. R-1 refers to Tata Sons, the holding company for the Tata group of companies.
The counsels had said that at a board meeting held in September, 2016, Mistry had introduced a proposal to litigate against the Siva group to recover nearly Rs 694 crore that Siva owed Tata Sons on account of purchase of shares from NTT DoCoMo. The board of directors of Tata Sons approved that Tata Sons may litigate against Siva. However, at the very next board meeting, Mistry was removed from the post of executive chairman, the affidavit had said.
It is pertinent to note that the Siva company got a discount of Rs 9 per share as immediately after this transaction (on March 8,2006) Government of Singapore-owned company Temasek Holdings was issued shares of TTSL at Rs 26 per share. This, the affidavit had added, resulted in a whopping benefit of nearly `468 crore to Siva in less than two weeks.