April 24, 2017
NCLT upholds Tata Sons' position
Mumbai: Tata Sons welcomes the order of the National Company Law Tribunal (NCLT) on April 17, 2017, which has ruled that the Petitioners representing certain companies of the SP Group (SP Group Companies) have failed to establish the merits of the Petition, and have also failed to demonstrate any cause of action against Tata Sons, the Tata Trusts and Mr. Ratan N. Tata. The Tribunal did not see a prima facie triable case to take forward. The order of the NCLT vindicates the position of Tata Sons, the Tata Trusts and Mr. Ratan N. Tata.
Commenting on the NCLT Order, the Executive Chairman of Tata Sons, Mr. N. Chandrasekaran, has said, “The Tata group, led by Tata Sons, has always been committed to the highest ethical standards and principles of governance. We welcome the NCLT’s order, and it is an endorsement of these values and principles. Tata Sons and the operating companies are focussed on growth to deliver value to our shareholders, and we thank all stakeholders for their continued support.”
Key Take-aways of the NCLT Order:
The SP Group Companies have not established a case of mismanagement and oppression and no evidence in support has been provided. The SP Group Companies have failed to establish a cause of action in this regard.
The SP Group Companies’ economic interest has not been affected in the manner in which Tata Sons was operated, and further that the actions of Tata Sons did not hurt public interest.
There are no grounds to support allegations relating to past transactions including cross-border acquisitions and business decisions of Operating Companies.
The Tata Trusts have not exercised their shareholder rights in a manner oppressive to the SP Group Companies.
The Trustees of Tata Trusts and in particular Mr. Ratan N. Tata was not a shadow director of Tata Sons. The allegations against Mr. Ratan N. Tata are vague and lack any material details.
Not only is the Petition not maintainable, but no grounds justifying the waiver application have been made by the SP Group Companies.