Tata Sons Vs Cyrus Mistry case study
In October 2016 a board meeting was held in Tata for the removal of Cyrus Mistry from the post of chairman. In the board meeting out of 9 directors, 7 directors voted to remove Cyrus Mistry and 1 director is neutral and only Cyrus Mistry voted in his favour. Cyrus Mistry was removed because tata thinks that Cyrus Mistry does not have values, ethos, and vision which is the basic foundation of the Tata group.
Cyrus Mistry was disinvesting the non-performing assets and reducing the group’s debt burden but on the other hand, Ratan Tata was well known for growing the group through both organic and inorganic strategies. Mistry family has 18% shareholding of Tata Group.
Cyrus Mistry along with other minority shareholders moved to NCLT regarding the violation of the rights of the minority shareholders.
NCLT after hearing both the parties Gives the judgment in the Favour of Ratan Tata group
Later on, Cyrus Mistry moved to NCALT and NCALT pass the judgment in the favor of Cyrus Mistry. NCALT order the Tata Group to restore Cyrus Mistry on the post of Chairman within 4 weeks.
After that Tata group moves to the Supreme Court challenging the order of NCALT. The Supreme Court stays the order of NCALT on the grounds that the judgment has several errors and so many points have been missed.
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