Tatas violated rules in sacking Mistry: RoC
The abrupt sacking of Cyrus Mistry as the chairman and director, respectively, of Tata Sons and its crown jewel TCS violated provisions of the...
Mumbai: The abrupt sacking of Cyrus Mistry as the chairman and director, respectively, of Tata Sons and its crown jewel TCS violated provisions of the Companies Act, RBI rules and more importantly, Tatas' own articles of association, RoC, Mumbai said in an RTI reply. The right to information (RTI) reply, given by Uday Khomane, the assistant registrar of companies (RoC), Mumbai on October 3, is in response to an RTI request filed by the investment arms of the Shapoorji Pallonji Group on August 31.
The reply said the way Mistry was removed from the chairmanship of Tats Sons and also as the director of Tata Consultancy Services (TCS), violated the relevant legal provisions under the Companies Act, 2013; the Reserve Bank rules governing NBFCs; and more importantly the rule 118 of the articles of association (AoA) of Tata Sons, the parent of the diversified Tata group, which is registered as an NBFC with the monetary authority.
A Tata Sons spokesman refused to offer detailed comments on the questions sent by PTI, saying, "We do not wish to comment on the matter as the matter is sub-judice." PTI has seen a copy of the RTI reply which is based on the assessment of the documents furnished by the Tatas in the aftermath of the boardroom coup on October 24, 2016 dismissing Mistry as the group chairman.
The report offers an internal view of the RoC, which interestingly is totally opposite of the view taken by the National Company Law Tribunal (NCLT), Mumbai earlier this year while dismissing the petition filed by Mistry challenging his dismissal from the group. In a boardroom coup, Mistry was sacked as the chairman of Tata Sons on October 24, 2016, two months short of four years in the corner room of the Bombay House, the global headquarters of the 150-old conglomerate that nets over 65 per cent of its income from outside the country.
Mistry, whose family is the single largest non-Tata shareholder with 18.4 per cent stake in Tata Sons, was nudged to take over the reins of the USD 103-billion group as the second non-Tata chairman, after Nowroji Saklatwala (1934-38), in December 2012, after group patriarch Ratan Tata retired. Mistry was removed as TCS director with 93.11 per cent votes at the EGM held on December 13, 2016, as per its company secretaries Parikh & Associates which cited section 169(2) of the Companies Act 2013 read with section 115 and 100 (2)(a) for his removal.
But TCS did not send out the complete representation of Mistry to all shareholders, which violates section 169 (4)(b) of the Companies Act, noted the RoC reply. The RTI reply is based on the queries posed by SP Kumar, western regional director, RoC, Mumbai which has found that Tata Sons violated rule 118 of its articles of its AoA, when it removed Mistry.