NCLT Rules Mistry Petition against Tatas as non-maintainable: Angel Broking

Views of Mr. Vaibhav Agrawal (Head of Research and ARQ):

"The National Company Law Tribunal (NCLT) on March 06th 2017 ruled the petition filed by Cyrus Mistry against Tata Sons as non-maintainable. After his ouster in October 2016, Cyrus Mistry had filed a petition against Tata Sons with the NCLT citing governance lapses and compromise of minority shareholder interests. The Tatas had already clarified that while the Mistry family held about 18% of the equity, their effective shareholding including preference shares was less than 3%. Under current rules, only a shareholder with more than 10% effective shareholding can file a minority interest petition with the NCLT and therefore NCLT upheld the Tatas interpretation of Mistry shareholding.

While the Mistry camp may still have the legal options open; from a strategic point of view this NCLT ruling largely limits the options for the Mistry family. It will be back to business for the Tata Group as this ruling will allow the Tata group to focus its resources and management bandwidth on more pressing business issues."

Source : Equity Bulls

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