MUMBAI: Tata Sons will move the Supreme Court to seek early interim relief from the tribunal order reinstating Cyrus Mistry ahead of the TCS board meeting scheduled for January 9 to consider Q3 results. The holding company is likely to file an appeal on January 2 although a hearing is possible only when the SC opens on January 6 after the winter break, said people with knowledge of the matter.Legal experts said the Mistry family-owned firms that hold stakes in Tata Sons can oppose an interim stay, which could force the Tatas to re-induct Cyrus Mistry pending a final order. The National Company Law Appellate Tribunal (NCLAT) ruled on December 19 that Mistry should be reinstated as director of Tata Sons and three group firms — TCS, Tata Industries and TTSL (Maharashtra). Mistry had been ousted as Tata Sons chairman in October 2016 and was eventually succeeded by N Chandrasekaran.Tata Sons and TCS declined to comment. The Shapoorji Pallonji Group also didn’t comment.“To the best of our knowledge, reinstatement of Cyrus Mistry as a director on Tata Sons and the other companies as per the NCLAT order has not been complied with and that itself is contempt of court,” said a legal representative close to the Mistrys.Tata Sons may Avoid Board Meeting“They (Tatas) sought a stay on chairmanship, but reinstatement as director was (to be) ‘forthwith’,” said the legal representative close to the Mistrys.Listed companies generally have a window of 45 days to declare results after the end of each quarter, according to Sudip Mahapatra, partner at law firm S&R Associates. That gives TCS time until mid-February to obtain relief from the Supreme Court.“In my view, it is unlikely that Tata Group will risk calling for a board meeting before getting any relief from the Supreme Court,” said Mahapatra.The holding company will avoid holding a board meeting, said one of the persons. 73053299 “We do not wish to complicate issues at the moment by doing so,” said one of them. “There is no emergency situation. It is a matter that will be pursued legally.”Tata Global Beverages Ltd is the only Tata company that has held a board meeting — to announce a CEO — following the NCLAT decision, since there was no immediate legal impact on it.Tata Sons will have to seek an immediate stay on the entire order from the Supreme Court, said Ashish K Singh, managing partner of law firm Capstone Legal. Postponing a scheduled board meeting can look like a deliberate attempt at not complying with the order, he said.“Cyrus Mistry can make an application before the NCLAT for seeking specific directions for compliance with the order passed in the upcoming board meeting,” he said. “In any case, the matter is listed on an application filed by the ministry of corporate affairs on January 2, seeking modification of the order at NCLAT on a different legal issue. Nothing stops either of the parties to approach the appellate tribunal for clarification at that time.”TATA SONS BOARD ASSURES CHANDRATata Sons board members have assured chairman N Chandrasekaran of their support through messages and calls, said executives aware of the matter. The chairman has held a meeting with group CEOs to apprise them of developments and allay concerns.Tata Trusts nominee Venu Srinivasan, Ajay Piramal and Farida Khambata were on the Tata Sons board at the time of Mistry’s ouster. Since then, Chandrasekaran, Harish Manwani, Bhaskar Bhat, Ralph Speth and Saurabh Agrawal have joined the holding company’s board. None of them responded to emails from ET.“The NCLAT order hasn’t dismissed the board, so the directors should continue to perform their duties,” said Shriram Subramanium, founder and MD of InGovern Research. “However, they should avoid any big decisions that have significant impact as there is an element of uncertainty to the role of the executive chairman.”The board should meet and discuss the impact and implications going ahead, said a corporate governance expert. There should be a continuity plan irrespective of what the SC decision could be, he added. A senior TCS executive said the order adds to uncertainty for the company, which may see its US business impacted by the upcoming presidential elections.The Registrar of Companies (RoC) has moved the NCLAT to implead itself in the case. The RoC, which is part of the corporate affairs ministry, has sought deletion of the words “illegal” and “with the help of the RoC” that were used by the tribunal in its order. The appellate tribunal is yet to hear the matter.
from Economic Times https://ift.tt/2QcjWAY
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