Mumbai: The National Company Law Tribunal (NCLT) on Monday dismissed pleas of Cyrus Mistry challenging his removal as Tata Sons chairman and the allegations of rampant misconduct on part of Ratan Tata and the company’s Board.
A special bench of the tribunal said that the board of directors at Tata Sons was “competent” to remove the executive chairperson of the company. NCLT bench members, B S V Prakash Kumar and V Nallasenapathy said that Mistry was ousted as chairman because the Tata Sons’ Board and its majority shareholders had “lost confidence in him”.
“The removal of Cyrus Mistry as executive chairperson was because the board lost confidence and not because they were contemplating that he would cause discomfort to Ratan Tata, Soonawala (N Soonawala, the group trustee), and other answering respondents… The Board is competent to remove an executive chairman,” said the NCLT bench reading out the judgement’s operative part.
Mistry, through his investment firms Cyrus Investment Pvt Ltd and Sterling Investment Corporations Pvt Ltd, filed the petition in the NCLT against Tata Sons, interim chairman Ratan Tata and other directors in December 2016. He filed the petition under Sections 241 and 242 of the Companies Act, which deals with oppression and mismanagement. The bench had dismissed his petition early 2017 citing eligibility clause, which was challenged by Mistry at the NCLAT in New Delhi. The NCLAT had asked the NCLT bench to hear the matter afresh.
According to section 241 of the Companies Act, any member of a company can make an application to the NCLT for seeking in case the company’s affairs are being conducted in a manner prejudicial to public interest, or in a manner oppressive to any member of such company.
The Tata Group has argued that the law clearly allows removal of a chairperson and director and Mistry was removed by a majority of seven out of nine, as Mistry had not voted for his removal and another official had abstained. The bench in its order today agreed with arguments of the Tata group. “ We have found no merit in the argument that Ratan Tata, Soonawala interfered, or that their conduct caused prejudice to the company’s interest. In view of all of the above, we hold that Mr Mistry’s removal doesn’t call for action under 241 of the (Companies) Act,” said the bench.
The tribunal rejected Mistry’s allegations against Tata Sons board and Ratan Tata of mismanagement of affairs and oppression of minority shareholders. It also rejected all allegations of lapses in governance on part of the group when it came to Air Asia, Nano and Aircel, and of a breakdown of corporate governance. The bench said it has found no merit in Mistry’s allegations and concluded that the board was acting in accordance with the Companies Act of 2013.
The office of Cyrus Mistry said that the ruling of the NCLT is “disappointing” and he will appeal against the order. “The ruling is in line with the earlier position expressed by the tribunal. An appeal on merits will be pursued. Matters like TTSL, Air Asia, recovery of dues from Siva, non-closure of a loss-making Nano, a struggling resolution of Tata Steel Europe, all present serious issues that will be pursued. Not only the facts that were under consideration but also subsequent facts and developments that continue to evidence oppression and mismanagement will be under scrutiny and will be pursued in full earnest,” said the statement.
It said Mistry would “continue to strive for ensuring good governance and protection of interests of minority shareholders and all stakeholders in Tata Sons from the wilful brute rule of the majority.”
Tata Sons Chairman N Chandrasekaran said that “a finality will be given to the judgement of NCLT, by all concerned in the larger interest of companies, the shareholders and the public”.
“The judgement has only re-affirmed and vindicated that Tata Sons and its operating companies have always acted in a fair manner and in the best interest of its stakeholders. The Tata Group has always been committed and will continue to be committed to transparency and good corporate governance of global standards,” said Chandrasekaran.
MPC to meet six times during 2019-20: RBI
Mumbai: The Monetary Policy Committee (MPC), which decides on key interest rates, will meet six times during the next financial year, the Reserve Bank of India (RBI) said.
The first meeting of the six-member MPC to decide on the first bi-monthly monetary policy statement for 2019-20 will be held from April 2 to 4.
The policy will be announced on April 4. Headed by RBI Governor Shaktikanta Das, the committee also includes two representatives from the central bank and three external members.
The external members are Indian Statistical Institute professor Chetan Ghate, Delhi School of Economics Director Pami Dua and Indian Institute of Management-Ahmedabad professor Ravindra H Dholakia.
According to the schedule provided by the RBI, the second meeting of the MPC in the next fiscal will be held on June 3, 4 and 6; third meeting (August 5-7); fourth meeting (October 1, 3 and 4); fifth meeting (December 3-5) and sixth meeting (February 4-6, 2020).
SBI raises Rs 1,251 crore by issuing Basel III-compliant bonds
New Delhi: The country’s largest lender State Bank of India (SBI) said it has raised Rs 1,251.30 crore by issuing Basel III-compliant bonds.
“The Committee of Directors for Capital Raising at its meeting held today on 22 March 2019 deliberated and accorded approval to allot 12,513 non-convertible, taxable, perpetual, subordinated, unsecured Basel lll-compliant additional tier-I bonds, for inclusion in additional tier-I capital of the bank…aggregating to Rs 1,251.30 crore,” SBI said in a regulatory filing.
The bonds with a face value of Rs 10 lakh each bears a coupon rate of 9.45 per cent per anum payable annually with call option after 5 years or any anniversary date thereafter, it said. The bonds were subscribed on Friday, it added.
State Bank of India (SBI) also said the central board of the bank at its meeting held has accorded its approval for extension of validity period for raising equity capital of up to Rs 20,000 crore from market by way of follow-on public offer, qualified institutional placement, preferential allotment, rights issue or any other mode or a combination of these till March 31, 2020.
Sebi fines 4 entities Rs 27 lakh for fraudulent trading in BSE stock options
New Delhi: Markets regulator Sebi imposed a total penalty of Rs 27 lakh on four entities for indulging in fraudulent trade in illiquid stock options segment of BSE.
Umapati Oil Mill and Ginning Factory, Yudhbir Chhibbar, Kasturbhai Mayabhai Pvt Ltd and Vimladevi Shyamsunder Khetan are the four entities, according to Sebi’s separate orders.
fter observing a large-scale reversal of trades in the BSE’s illiquid stock options segment, Sebi conducted a probe from April 2014 to September 2015.
Following the probe, the regulator found that the trades executed by the entities were not genuine as they were reversed within few seconds with same counter parties with significant difference in price, resulting in profit to the entities.
Securities and Exchange Board of India (Sebi) said it was a deliberate attempt to deal in such a fashion and not a mere coincidence.
The trades executed by the entities were not genuine and created an appearance of artificial trading volumes, thereby violating PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) regulations, Sebi noted.
Accordingly, a fine of Rs 8.7 lakh and Rs 8.4 lakh were imposed on Yudhbir Chhibbar and Vimladevi, respectively while a penalty of Rs 5 lakh each was levied on Umapati Oil Mill and Kasturbhai Mayabhai Pvt Ltd, totalling Rs 27.1 lakh.
In a separate order, Sebi imposed a total fine of Rs 6 lakh on four promoters of Artech Power Products for delayed disclosures to exchanges regarding their change in the shareholding in the company.
Ranjith Vijayan, I V Vijayan, Repsy Vijayan and Resmi Vijayan are the four promoters, according to Sebi’s order.
The promoters have deprived the vital information to the public by non-disclosure /delayed disclosure as mandated by the Takeover Regulations, Sebi noted.
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