Ratan N in the Supreme Court on Friday ruled in favor of the Tata Group in the Cyrus Mistry-deportation case. Tata declared itself “thank you”. “It’s not a matter of winning or losing,” he said in a statement, tweeting, “In the wake of the relentless attacks on my integrity and the group’s ethical behavior, it is the ethics of affirming the values of judgment that uphold all the appeals of Tata Sons and the guiding principles of the group.”
Mistry, who was ousted as Tata Sons chairman on October 24, 2016, has committed the worst-ranking against India’s largest conglomerate, and over the years the group has been defensive over what many see as its vicious attempt. Ratan Tata’s successor is an old guard who denies functional autonomy. In December 2019, the National Company Law Tribunal (NCLAT) ordered Mistry to be re-appointed, which he did not take and Tata appealed to the Supreme Court of India. Now the judiciary’s final ruling set aside the NCLT orders – which remained in place last January – and upheld the right to remove a key executive of the Tata Group, following Mistry’s success in 2016. Chandrasekaran is firmly in the saddle as chairman of the group. The end of leadership uncertainty is a huge relief to the group.
The saga of India’s biggest corporate war is not over yet. There is an equity tangle to sort out. Mistry represents the Shapoorji Pallonji Group, a minority shareholder in Tata Sons with a stake of about 18.5% and is alleged to have been abused at the hands of the group. None of Mistry’s allegations have been handled under Indian law. Although the Tata Sons Articles of Association may find it unjust to prohibit a minority shareholder from selling his shares without company clearance, a private company may take extraordinary circumstances to justify external interference if it decides it is best for its own interests. The Tata Group, therefore, has a handle on those shares. It is proposed and must, buy them back. But at what value? It is now time for the two sides fighting to work with each other. He chips are stacked on the Tata side. Tata will look closely for what it says about the group’s ethics and values, giving Mistry a fair deal.