Shareholders of Tata Sons Ltd, controlled by Tata Trusts and Tata companies, voted to remove Cyrus Mistry as a director at an extraordinary general meeting (EGM) on Monday.
The shareholders of Tata Sons Ltd., at the extraordinary general meeting held today (Monday), passed, with the requisite majority, a resolution to remove Mr Cyrus P Mistry as a director of Tata Sons Ltd.Tata Sons Media Statement
On the board of Tata Sons since 2006, Mistry’s plea to stall the EGM had been rejected last week by the National Company Law Appellate Tribunal (NCLAT). Earlier, the National Company Law Tribunal (NCLT) too had denied him relief. Mistry had moved the NCLT after the Tata Sons board sacked him as chairman on 24 October 2016.
The result of the EGM was a foregone conclusion since a simple majority is required to remove a director from the board of a company. Tata Trusts hold 66 percent in Tata Sons and Tata companies own another 15 percent.
The Mistry family, which now holds nearly 18.5 percent in Tata Sons, had first acquired a stake in the Tata Group’s holding company in the 1930s and gradually increased it over the years.
Mistry's two investment arms have dragged Tata Sons and Ratan Tata, along with other directors, to the NCLT alleging oppression and mismanagement.
Tata Sons has questioned Mistry’s right to move the NCLT, arguing that his two firms hold under three percent in the company on a fully diluted basis, a claim Mistry has contested.
According to the Companies Act, a shareholder must own at least one-tenth of the issued share capital of a company to file a suit of oppression or mismanagement.
The NCLT is expected to hear the case on 13 February.
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)