Tata Versus Mistry: How The Saga Unfolded
It was his appointment at the helm of the Tata Group and subsequent ouster that brought Cyrus Mistry in the spotlight.
Cyrus Mistry was a scion of the Shapoorji Pallonji Group, which is known for its interests in construction, real estate and engineering businesses. But it was his appointment at the helm of the Tata Group and subsequent ouster that brought him in the spotlight.
Mistry was killed in a car accident near Mumbai on Sunday. He was 54.
Shapoorji Pallonji family, the group's parent entity, is the single largest shareholder in Tata Sons with 18.47% stake. And that got the family a seat on the board of Tata Sons. After his father Pallonji Mistry stepped down from the board, Mistry was named as a director in 2006.
In 2011, he was roped in to head the conglomerate to replace Ratan Tata and took over in 2012. But was removed four years later in October 2016. Differences between the two were at the heart of this bitter falling out.
Mistry had mounted a legal challenge, and after an initial setback at the National Company Law Tribunal, won at the appellate tribunal. The Supreme Court, however, set aside the NCLAT order, handing a win to the Tata Group.
Here's how the saga unfolded.
November 2011: Tata Sons Names Mistry As Ratan Tata's Successor
In November 2011, Tata Sons named Cyrus Mistry as chairman to replace Ratan Tata a year later. Mistry took over in December 2012.
2012-2016: Mistry Says He Tried To Turn Around Group
Mistry tried to turn around the group that had faced setbacks in steel and auto businesses, according to his statements.
October 2016: Tata Sons Removes Mistry As Chairman
The Tata Group removed Mistry because citing a growing “trust deficit” with the biggest shareholder.
Read more here
December 2016: Mistry Mounts Legal Challenge
In December 2016, two firms owned by Cyrus Mistry’s family filed a case of oppression and mismanagement against Tata Sons and 20 others, including Ratan Tata.
In March 2017, the NCLT ruled that the Mistry firms are not eligible to pursue the allegations.
On appeal, the Cyrus Mistry firms secured a partial win at the National Company Law Appellate Tribunal in September. The NCLAT had granted the two Mistry firms a waiver from the 10% shareholding requirement to pursue oppression and mismanagement charges against Tata Sons.
July 2018: NCLT Dismisses Mistry’s Plea Against Tata Sons
Cyrus Mistry lost the legal battle against Tata Sons Ltd. as the company law tribunal rejected all his allegations and ruled that the parent of India’s largest conglomerate had the right to remove him as its chairman.
Read more here.
December 2019: Cyrus Mistry Wins At NCLAT
Mistry moved the the National Company Law Appellate Tribunal against the NCLT verdict. In an important victory for him, the NCLAT ruled that his dismissal as chairman of Tata Sons Ltd. was illegal.
Read more here.
January 2020: Tata Sons Pushes For Urgent Supreme Court Hearing
Tata Sons Pvt. moved the Supreme Court challenging NCLAT's decision restoring Mistry as executive chairman, saying the verdict "undermined corporate democracy" and the "rights" of its board of directors.
Read more here.
January 2020: Tata Sons Argues NCLAT Order A “Recipe For An Unmitigated Disaster”
Tata Sons Pvt. moved the Supreme Court against the National Company Law Appellate Tribunal’s judgment to reinstate Mistry as executive chairman, calling it a “recipe for unmitigated disaster”.
Read more here.
January 2020: Supreme Court Stays Full NCLAT Order
The Supreme Court stayed the National Company Law Appellate Tribunal’s judgment to reinstate Cyrus Mistry as the executive chairman of Tata Sons and director on the board of group companies.
Read more here.
February 2020: Mistry Files Cross Appeal In Supreme Court
Mistry moved the Supreme Court for removal of several anomalies in NCLAT’s Dec. 18 order in the Tata-Mistry case, saying his family—Shapoorji Pallonji—deserved more relief from the tribunal.
Read more here.
July 2020: Brookfield Mulls Investment in Debt of Mistry’s Group
Shapoorji Pallonji Group was in preliminary talks with Brookfield Asset Management Inc. to raise as much as $400 million in structured debt to help repay maturing obligations, Bloomberg reported. The group was earlier in discussions to borrow as much as $1 billion using part of its Tata Sons Ltd. stake as collateral, it said.
Read more here.
September 2020: SP Group Seeks Damages From Tata Sons
The Shapoorji Pallonji Group sent legal notices seeking damages from Tata Sons and its board members for "illegally blocking" the Mistry family's bid to raise funds by pledging shares of the Tata Group’s key holding company Tata Sons.
Read more here.
September 2020: Tata Offers to Buy Out Mistry Family Stake
Tata Group, India’s biggest conglomerate, said it’s open to buying out the stake held by its largest minority shareholder as part of a proposal to help end a years-long legal dispute between the two parties.
Read more here.
September 2020: Time To Separate From Tata, Says Mistry Family
“The current situation has forced the Mistry family to sit back and reflect on the past, present and possible future for all stakeholders. The past oppressive actions, and the latest vindictive move by Tata Sons that impact the livelihoods of the wider SP Group community leads to the inexplicable conclusion that the mutual co-existence of both groups at Tata Sons would be infeasible," said a statement by the Mistry family-controlled SP Group.
Read more here.
October 2020: Mistry Family Proposes Share Swap
The SP Group proposed:
A selective reduction of capital at Tata Sons thereby extinguishing shares held by them.
In exchange, SP Group be granted shares in listed companies of the group.
Also, cash consideration or shares for brand value, unlisted assets etc.
Read more here.
December 2020: Supreme Court Starts Hearing Matter
The Supreme Court began hearing the case. The two sides reiterated many of the arguments made at the tribunal and appellate tribunal. The order was reserved.
Read more here.
Supreme Court Sets Aside NCLAT Order In A Win For Tata Sons
In March 2021, the Supreme Court set aside the NCLAT order. All petitions by Tata Group were allowed and all petitions by Mistry Group dismissed. Consequently, Mistry’s assertion of oppression and mismanagement at Tata Sons did not succeed at the apex court.
Read more here.