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Tata fights order to bring back ousted chief Cyrus Mistry

Indian conglomerate takes boardroom feud to country's highest court

Cyrus Mistry, then-chairman of the Tata group, in 2014: The legal wrangling over his 2016 dismissal continues.   © Reuters

NEW DELHI -- The Tata group, India's largest conglomerate, went to the Supreme Court on Thursday to challenge a tribunal's earlier order to reinstate ousted leader Cyrus Mistry.

The National Company Law Appellate Tribunal ruled Dec. 18 that holding company Tata Sons had broken the law when removing Mistry as chairman in October 2016 and replacing him with Natarajan Chandrasekaran in early 2017.

The NCLAT decision ordered that Mistry be given back his old job.

The dispute risks diverting management resources away from decision-making at a time when the group faces such challenges as a slump at automaker Tata Motors and the downsizing of Tata Steel's European operations.

Mistry's abrupt dismissal gripped the Indian business world, where family-owned business empires occupy some of the commanding heights of the economy.

Tata Sons, the group holding company, is 66%-owned by the founding Tata family. Mistry's family, meanwhile, holds an 18% stake and is related to the Tatas by marriage.

Disagreement between Mistry and the Tata family's Ratan Tata is said to have been behind the dismissal.

Mistry's removal briefly brought Ratan Tata in as interim chairman at the group, which marked its 150th anniversary in 2018. A nominating committee including Ratan Tata later appointed Chandrasekaran as Mistry's successor. Chandrasekaran became the first person outside the extended Tata family to lead the group.

Mistry sued the company shortly after his ouster, and the two sides have been waging a legal battle.

"Today's judgment isn't a personal victory for me, but is a victory for the principles of good governance and minority shareholder rights," Indian media quoted him as saying in statement in response to the NCLAT decision.

But any turmoil risks undermining Chandrasekaran's leadership at a delicate time for the group. For one, money-losing Tata Motors is said to be in talks with Chinese automakers on a possible tie-up, India's Mint business newspaper has reported.

Tata Steel, meanwhile, announced in November plans to cut up to 3,000 jobs in Europe.

Shares in both Tata group companies could move sharply, depending on how the legal dispute over Mistry's dismissal unfolds, Reliance Securities' Naveen Kulkarni said after the NCLAT decision in December.

Additional reporting by Akira Hayakawa

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