Tata Sons chairman N Chandrasekaran on Wednesday said that he will explore the appropriate legal recourse against the National Company Law Appellate Tribunal (NCLAT) judgement to reinstate ousted Chairman Cyrus Mistry.

This comes after the NCLAT ruled that appointment of N Chandrasekaran as the head of the holding company of salt-to-software conglomerate was illegal.

In a letter to Tata employees, Chandrasekaran said, "From February 2017, our efforts have been primarily focused on: restoring stability and moving decisively towards a healthier financial position; conducting our businesses with the highest ethical standards, which the group has been known for, for over 150 years; honouring our commitments to all stakeholders and resolving outstanding issues; driving growth and transforming our businesses for the future."

"Going forward, I assure you that we have set ourselves on a course that will make the Tata Group stronger and more vibrant than it has ever been before," Chandrasekaran said.

"I urge all employees to stay focused on their businesses and the welfare of our stakeholders. We will continue to work towards deepening the legacy of this unique institution," he added.

The NCLAT held that the group's chairman emeritus Ratan Tata's actions against Mistry were oppressive and the appoint of the new chairman illegal. It, however, stayed the operation of the order with respect to reinstatement for four weeks to allow Tatas to appeal.

Setting aside a lower court order, the NCLAT also quashed the conversion of Tata Sons into a private company from a public firm. It also directed Tata Sons not to take any action against Mistry, whose family owns some 18 percent interest in Tata Sons.

The remaining 81 percent is held by Tata Trusts and Tata Group companies along with Tata family members.

Mistry, the scion of the wealthy Shapoorji Pallonji family, had in December 2012 succeeded Ratan Tata as the Executive Chairman of Tata Sons, a post that also made him the head of all Tata group listed firms such as Tata Power and Tata Motors. In an overnight coup, he was removed as the Chairman of Tata Sons in October 2016.

Along with him, the entire senior management too was purged and Ratan Tata was back at the helms of affairs four years after he took retirement. Mistry challenged the removal before the Mumbai bench of National Company Law Tribunal but lost and then went in for appeal at the NCLAT.

Tatas had cited the alleged failure of Mistry to "deliver on the promises that he had made at the time of his selection as the Chairman" and inability to lead the group in a cohesive manner and failure in providing proper guidance and support to the group as the reasons for his sacking.

While Mistry termed the NCLAT judgment as "victory for the principles of good governance and minority shareholder rights", Tata Sons said the NCLAT order appears to have gone beyond the specific reliefs sought by Mistry and it was not clear as to how the NCLAT order seeks to over-rule the decisions taken by shareholders of Tata Sons and listed Tata operating companies at validly constituted shareholder meetings.

Mistry was the sixth chairman of Tata Sons and had a tenure up to March 2017. The NCLAT order gives him five more months at the helm of Tata Sons if the said order is not stayed or overturned by the Supreme Court.

First Published:Dec 18, 2019 10:29 PM IST