Cyrus Mistry calls Chandrasekaran's appointment illegal
�The Tata Sons Board meeting held on January 12, 2017 and the appointment of N Chandrasekaran as chairman of Tata Sons have been done as per the company�s Articles of Association and relevant laws,� a Tata Sons spokesperson said.
Days after the appointment of new Chairman of Tata Sons Natarajan Chandrasekaran, ousted Chairman Cyrus Mistry had opposed this appointment.
Reportedly, he may even be preparing to open another legal front challenging the decision, as he believes the amtter was still sub-judice and this new appointment is illegal.
According to the reports, a day before the board of Tata Sons met to consider Chandrasekaran as the chairman last week, Mistry shot off an angry letter to his fellow board members challenging the legality of the appointment.
“Unlike the October board meeting when the decision to sack Mistry was not mentioned in the board agenda circulated before, this time the members were aware of what to expect. Mistry is still a director of Tata Sons and the agenda papers were circulated to him as well. That prompted the mail from him,” an official aware of the communications told Times of India.
However, Mistry did not physically attend the board meeting the following day.
Mistry was sacked on October 24 last year. Following the sudden expulsion, Mistry and Tata had a public feud brimming which got uglier day by day. Mistry challenged the decision in the National Company Law Tribunal (NCLT). In his petition, Mistry alleged collusion between Tata Sons and Tata Trusts and oppression of minority interests at the $103-billion Indian conglomerate.
The petition was filed by Cyrus Investments and Sterling Investments — Mistry’s investment companies. It also alleged that Tata Sons’ move to call an extraordinary general meeting on February 6 violated the undertaking given by its lawyers at the NCLT in December.
Tatas after getting a green signal from their legal advisors decided to proceed with the board meeting.
“The Tata Sons Board meeting held on January 12, 2017 and the appointment of N Chandrasekaran as chairman of Tata Sons have been done as per the company’s Articles of Association and relevant laws,” a Tata Sons spokesperson told ET.
Article 118 of the Articles of Association of Tata Sons, passed under a special resolution following a Tata Sons EGM on December 6, 2012, lays out the terms for the appointment of the chairman. It says: “For the purpose of selecting a new Chairman of the board of directors and so long as the Tata Trusts own and hold in the aggregate at least 40% of the paid up Ordinary Share Capital of the Company for the time being, a Selection Committee shall be constituted in accordance with the provisions of this Article to recommend the appointment of a person as the Chairman of the Board of Directors and the Board may appoint so recommended as the Chairman of the Board of Directors, subject to Article 121 which requires the affirmative vote of all Directors appointed pursuant to Article 104B.”
Similarly, Section 196 and 104 (i) (ii) of Companies Act also stipulates the grounds for the appointment of chairman, MD and directors.