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.
WPI inflation eases to near 2-year low at 2.02 per cent in June
New Delhi: Wholesale price-based inflation declined for the second consecutive month to its 23-month low of 2.02 per cent in June, helped by decline in prices of vegetables as well as fuel and power items, according to official data released on Monday.
The Wholesale Price Index (WPI)-based inflation was at 2.45 per cent in May. It was 5.68 per cent in June 2018. Inflation in food articles basket eased marginally to 6.98 per cent in June, from 6.99 per cent in May.
Vegetable inflation softened to 24.76 per cent in June, down from 33.15 per cent in the previous month. Inflation in potato was (-) 24.27 per cent, against (-) 23.36 per cent in May.
However, onion prices continued the rising trend with inflation at 16.63 per cent during the month, as against 15.89 per cent in May. WPI inflation in June is the lowest in 23 months, since July 2017, when it was at 1.88 per cent.
Inflation in ‘fuel and power’ category cooled substantially to (-)2.20 per cent, from 0.98 per cent last month. Manufactured items too saw decline in prices with inflation at 0.94 per cent in June, against 1.28 per cent in May.
WPI inflation data for April has been revised upwards to 3.24 per cent from provisional 3.07 per cent. Data released earlier this week showed that retail inflation spiked to a six-month high of 3.18 pc in June, on costlier food items.
The Reserve Bank, which mainly factors in retail inflation for monetary policy decision, on June 6, lowered its benchmark lending rate to nearly a nine-year low of 5.75 per cent, even as it upped its inflation projection to 3-3.1 per cent for the first half of 2019-20.
Flagging uncertain monsoon, unseasonal spike in vegetable prices, crude oil prices, financial market volatility and fiscal scenario as risks to inflation, the RBI projected upward bias in food inflation in near term.
China second-quarter GDP growth slows to 27-year low
Beijing: China`s economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting U.S. trade pressure.
While more upbeat June factory output and retail sales offered signs of improvement, some analysts cautioned the gains may not be sustainable, and expect Beijing will continue to roll out more support measures in coming months.
s trading partners and financial markets are closely watching the health of the worlds second-largest economy as the Sino-U.S. trade war gets longer and costlier, fuelling worries of a global recession.
s growth data marked a loss of momentum for the economy from the first quarters 6.4%, amid expectations that Beijing needs to do more to boost consumption and investment and restore business confidence.
The April-June pace was in line with analysts` expectations for the slowest since the first quarter of 1992, the earliest quarterly data on record.
s growth could slow to 6% to 6.1% in the second half," said Nie Wen, an economist at Hwabao Trust. That would test the lower end of Beijings 2019 target range of 6-6.5%.
Cutting banks` reserve requirement ratios (RRR) “is still very likely as the authorities want to support the real economy in a long run,” he said, predicting the economy would continue to slow before stabilising around mid-2020.
China has already slashed RRR six times already since early 2018 to free up more funds for lending and analysts polled by Reuters forecast two more cuts this quarter and next.[ECILT/CN]
Beijing has leaned largely on fiscal stimulus to underpin growth this year, announcing massive tax cuts worth nearly 2 trillion yuan ($291 billion) and a quota of 2.15 trillion yuan for special bond issuance by local governments aimed at boosting infrastructure construction.
The economy has been slow to respond, however, and business sentiment remains cautious.
Trade pressures have intensified since Washington sharply hiked tariffs on Chinese goods in May. While the two sides have since agreed to resume trade talks and hold off on further punitive action, they remain at odds over significant issues needed for an agreement.
Data on Friday showed China`s exports fell in June and its imports shrank more than expected, while an official survey showed factories were shedding jobs at the fastest pace since the global crisis..
Premier Li Keqiang said this month that China will make timely use of cuts in banks` reserve ratios and other financing tools to support smaller firms, while repeating a vow not to use “flood-like” stimulus.
A steady string of weak economic data in recent months and the sudden escalation in the U.S.-China trade war had sparked questions over whether more forceful easing may be needed to get the Chinese economy back on steadier footing, including some form of interest rate cuts.
But June activity data showed industrial production, retail sales and fixed-asset investment all beat analysts
forecasts, suggesting that Beijings earlier growth-boosting efforts may be starting to have an effect.
Analysts also say room for more aggressive policy easing is also being limited by fears of adding to high debt levels and structural risks.
Industrial output climbed 6.3% from a year earlier, data from the National Bureau of Statistics showed, picking up from May`s 17-year low and handily bearing a forecast for 5.2% growth.
Daily output for crude steel and aluminium both rose to record levels.
Retail sales jumped 9.8% – the fastest clip since March 2018 – and confounding expectations for a slight pullback to 8.3%. Gains were led by a 17.2% surge in car sales.
Some analysts, however, questioned the apparent recovery in both output and sales.
Capital Economics said its in-house model suggested slower industrial growth, while the jump in car sales may have been partly due to a one-off factor.
Car dealers in China are offering big discounts to customers to reduce high inventories that have built up due to changing emission standards. Motor vehicle production actually fell 15.2%, the 11th monthly decline in a row, suggesting automakers don`t expect a sustained bounce in demand any time soon.
“The monthly data were better than expected… (But) we are sceptical of this apparent recovery given broader evidence of weakness in factory activity,” said Julian Evans-Pritchard, Senior China Economist at
“Looking ahead, we doubt that the data for June will mark the start of a turnaround.”
Fixed-asset investment for the first half of the year rose 5.8% from a year earlier, compared with a 5.5% forecast and 5.6% in the first five months of the year.
Real estate investment, a major growth driver for the world`s second-largest economy, quickened in June. It rose 10.1% from a year earlier, accelerating from a 9.5% gain in May but still slower than in April, Reuters calculated.
Still, the economy remains in a complex situation, with external uncertainties on the rise, the statistics bureau said, adding China will work to ensure steady growth.
RBI to come out with mobile app for currency notes identification
New Delhi: The Reserve Bank of India will come out with a mobile application to help visually challenged people in identifying currency notes as cash still remains a dominant mode of transaction.
At present, banknotes in the denominations of Rs 10, 20, 50, 100, 200, 500 and 2,000 are in circulation, besides Re 1 notes issued by the Centre.
The RBI said that identification of banknote denomination is key to successful completion of cash-based transactions by visually impaired persons.
Intaglio printing based identification marks for helping the visually challenged in identification of banknotes denomination are present in the notes of Rs 100 and above.
After demonetisation of old Rs 500/1,000 notes in November 2016, new banknotes in design and sizes have been put in circulation.
“The Reserve Bank of India has been sensitive to the challenges faced by the visually challenged in conducting their day to day business with Indian banknotes,” said the central bank while scouting for a vendor to develop the mobile application.
The proposed mobile app would be able to identify the denomination of notes of Mahatma Gandhi Series and Mahatma Gandhi (New) series by capturing the image of the notes placed in front of mobile camera, the RBI said while inviting bids from tech firms to develop the app.
The RBI had come out with a similar ‘request for proposal’ from vendors but later cancelled it.
The app will also generate “audio notification” intimating the currency note denomination to the user if image is captured correctly, else intimating the user to try again in case of image is not readable.
There are about 80 lakh blind or visually impaired people in the country, who are likely to benefit from the initiative of the central bank.
In June, 2018 the central bank had declared that it would explore the feasibility of developing a suitable device or mechanism for aiding the visually impaired in the identification of Indian banknotes.