The councilors of the Shapoorii Pallonji family told the Supreme Court today that the Tata group was not managed professionally by a board but by the president of Tata Trusts, Ratan Tata, by the Trusts, which appointed directors on the Tata Sons board. Tata Sons is the promoter of several listed companies with a value of 65 lakhs. “If they wanted to keep it a family affair, then they would have to stay that way instead of making it public,” said CA Sundaram, the Mistry family counselor.
The Supreme Court is currently hearing an appeal filed by the Tata group against an order of the National Corporate Legal Appeals Court (NCLAT) in December last year. The NCLAT reinstated Cyrus Mistry as Tata’s group leader, calling the appointment of his successor N Chandrasekaran illegal.
Conglomerates Shapoorii Pallonji and Tata have been involved in a court battle since 2016 when Cyrus Mistry, a descendant of the family that rules the Shapoorii Pallonji Group, was fired as chairman of Tata Sons.
Tata Trusts, which owns a 66 percent stake in Tata Sons, is chaired by Ratan Tata, the group’s patriarch, while the Mistry family owns 18.4 percent in the company.
Mr Sundaram told the supreme court that a public charity trust cannot legally run such companies and Tata Sons needs it to be managed by a board. “They cannot use the Articles of Association of Sons of Tata to assert that they have absolute right over the affairs of the company,” he said.
The Tata Sons Association Article has become controversial because they give veto powers to directors appointed by Trust on the board of Tata Sons, even if the Trust’s interest rate drops to 40%.
Harish Salve, the councilor of the Tata group, had previously said that the Mistry family had voted for the amendments in the articles of associations but expressed dissatisfaction after Cyrus Mistry was sacked as the president of the Tata group in October 2016.
Mr Sundaram said the SP Group had voted in favor of articles because of the alliance relationship they had with Tata Sons, and had no doubt that the matter would be used against them.
“The trustees of Tata Trust have acted as shady board members,” Mr Sundaram said. “The trustees had so much control that they did not allow Tata Teleservices to bid for additional spectrum.”
The hearing will continue tomorrow.