IMB 901

THE HOUSE OF TATA:

GOVERNANCE CHALLENGES (B)

J. RAMACHANDRAN, SAVITHRAN RAMESH, AND K.S. MANIKANDAN

J. Ramachandran, Professor of Strategy, Savithran Ramesh, Research Associate both at the Indian Institute of Management
Bangalore and K.S Manikandan, Associate Professor at the Indian Institute of Management Tiruchirappalli prepared this case for
class discussion. This case has been developed from publicly available information and is not intended to serve as an
endorsement, source of primary data, or to show effective or inefficient handling of decision or business processes.

Copyright © 2021 by the Indian Institute of Management Bangalore and Indian Institute of Management Tiruchirappalli. No part
of the publication may be reproduced or transmitted in any form or by any means – electronic, mechanical, photocopying,
recording, or otherwise (including internet) – without the permission of Indian Institute of Management Bangalore and Indian
Institute of Management Tiruchirappalli.

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

March 2021. The Supreme Court of India brought the legal dispute between Tata Sons and Cyrus Mistry 1 to an end
by setting aside the order of the National Company Law Appellate Tribunal (NCLAT) which had ruled in favor of Cyrus
Mistry (Mistry). The Supreme Court adjudicated in favor of Tata Sons and its majority shareholders Tata Trusts by
concluding that the affairs of Tata Sons were not being run in a manner which was oppressive or unfairly prejudicial
to the minority shareholders. Consequently, all the directions issued by NCLAT, including the reinstatement of Mistry
as executive chairman in Tata Sons and director in various group companies, were set aside. Ratan Tata (RNT), the
chairman of Tata Trusts, issued a statement in reaction to the ruling:

I appreciate and am grateful for the judgement passed by the honourable Supreme Court today. It is not an
issue of winning or losing. After relentless attacks on my integrity and the ethical conduct of the group, the
judgement upholding all the appeals of Tata Sons is a validation of the values and ethics that have always
been the guiding principles of the group. It reinforces the fairness and justice displayed by our judiciaryi.

Mistry, disappointed by the judgment, reacted:

My aim at Tata, an iconic institution undergoing a generational change in leadership, was to ensure a robust
Board driven system of decision making and governance that is larger than any one individual. A key focus
was to enable the directors on various Boards to discharge their fiduciary duties without fear or favor, while
still ensuring that shareholders views were reflected in strategy and actions. It continues to be my belief
that it is by such a model, that one would protect value for all stakeholders in Tata Sons and its various
Group companies…

Every member of society looks to institutions such as courts to validate and endorse the appropriateness
of his or her actions and beliefs. As a minority shareholder of Tata Sons, I am personally disappointed by
the outcome of the judgement with respect to our case. Although I will no longer be able to influence the
direction of governance of the Tata group directly, I hope that the issues I have raised, will cause deeper
reflection and influence individuals concerned to catalyze change. I sleep with a clear conscience.ii

THE LEGAL BATTLE

After Tata Sons (and Tata Trusts in the instance of Tata Sons) voted to remove Mistry as a director from Tata Group
Companies and Tata Sons, Mistry approached the National Company Law Tribunal (NCLT) to assert his rights as a
minority shareholder and argue that the affairs of Tata Sons (and as a consequence, the Tata Group) was being run
in a manner oppressive or prejudicial to the minority shareholders. In making this claim, he defended his
performance as a chairman and sought to highlight the manner in and extent to which the Tata Trusts and Ratan
Tata (RNT) sought to interfere in the decision making at Tata Sons and other group companies. The contentions
threw light on the nature of challenges faced by a group chairman, the role of the board in business groups, as well
as the right of shareholders.

In the arguments before the tribunal, Mistry strongly defended the performance of Tata Group during his tenure by
citing the positive evaluations he had received from the Nominations and Remunerations Committee (NRC) of Tata
Sons board (and the group companies of which he was the chairman) over the past three years, including the positive
evaluation only a few months before his removal. Before the NCLT, in addition to reiterating the challenges he
inherited, Mistry cited RNT’s interference in the decision making and other governance-related challenges. Some of
the instances of interference in decision making given by Mistry and the responses of Tata Sons to them are given
below:

1The case was filed through Cyrus Investments and Sterling Investments (collectively SP Group) since only shareholders could make contentions
regarding oppression and mismanagement. Cyrus Investments and Sterling Investments were the investment companies through which the
Mistry family held their shares in Tata Sons. For ease of reading convenience, their arguments as minority shareholders are henceforth attributed
to Mistry.

Page 2 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

Tata Steel: When Mistry was in talks with ThyssenKrupp for a joint venture in Europe and negotiating with the UK
government for support, Lord Bhattacharya issued a public statement that Tata Steel will stay invested in the United
Kingdom and create more jobs. iii Mistry argued that this statement, made allegedly under the authority of RNT, was
evidence of how RNT interfered from outside the corporate constitutional framework of Tata Sons. iv As further
evidence of this intent, Mistry also referenced a letter in which RNT made clear he was against the divestment of
Tata Steel UK operations, which went against Tata Steel’s board’s earlier statement that all options including
divestment should be explored.v In response, Tata Sons stated that there was no basis to claim that RNT jeopardized
merger talks with ThyssenKrupp or the talks with the UK Government. vi It was argued that Mistry did not place on
record any evidence where he stated the need to divest or restructure Corus or where RNT showed obstruction to
the stand taken by Mistry on this issue.vii Mistry also did not inform the board of Tata Steel about RNT allegedly
jeopardizing merger talks.viii

Tata Motors: Mistry argued that RNT obstructed Tata Motors from shutting down the Nano project for emotional
reasons even though it was consistently loss making and had a bearing on the dividend paid to Tata Motors’
shareholders.ix To show this, he pointed to instances where RNT offered suggestions on marketing Nano and
improving its sales, while not considering the possibility of shutting down the unviable project that was losing money
on each car sold.x Tata Sons and RNT disputed the claims made by Mistry by stating that RNT only provided his inputs
when his advice was sought by Mistry or when it was within the rights provided to Tata Trusts under articles of
association of Tata Sons .xi

Mistry stated that RNT interfered in Tata Motors operations by asking why they were not dealing with Ola (in which
RNT had a personal stake) even though he knew Tata Motors was in talks with Uber, the main competitor of Ola. xii
RNT maintained that the intent was only to understand why such a large deal with Ola was not being prioritized. In
his letter to Mistry, RNT had stated that a “proposal to offtake 150,000 Indicas and Nanos should be welcomed by
the company, as it constitutes about 15 months' production at current sales levels. If Tata Motors could execute
both the Ola cabs and Uber proposals, it would be even better and would be a real shot-in-the-arm for the company.
How will Tata Motors justify turning away any proposal for a guaranteed offtake? And how would such a decision
be viewed in the public domain?”xiii

There was also an issue raised by Tata Trusts in relation to a rights issue of shares that Tata Motors intended to carry
out. Mistry referenced a letter from RNT to Mistry stating that the rights issue of Tata Motors Ltd. (a listed company)
had not been explicitly discussed with the Trusts and hence could be seen as a breach of the amended articles of
Tata Sonsxiv (the amendments are described in the next section). RNT insisted that “before such an issue is cleared
by the underlying operating company”, approval of the board of Tata Sons would have to be taken, thereby insisting
on prior consultation.xv According to Mistry, the board of Tata Sons (including trust nominees) had already approved
the funding requirements of Tata Motors and this was also reflected in the cash plan of Tata Sons. The views of
Noshir Soonawala (Soonawala), a trustee of the Tata Trusts, had also been sought before it was taken to the board
of the company. Soonawala denied supporting the rights issue by stating that while a meeting did take place 2 years
before the rights issue, no final laid-out timeline was agreed on the plan.xvi

Banking License Application: Mistry alleged that RNT set specific conditions for Tata Sons to submit the application
for a banking license. RNT wrote that “the approval would be on the clear understanding that the Trusts would have
the opportunity to have a full presentation on the pros and cons of the proposed bank as also the alternative options
on the basis of which the Trusts could debate and decide on their position in the matter”. xvii Mistry stated that this
was after two rounds of discussions were already held with RNT.

Bidding for Spectrum by Tata Teleservices: Mistry also referred to an instance where he had to alter the board agenda
of Tata Sons to change an item that required approval from the board to an item that only conveyed information to
the board.xviii The approval was to be sought in relation to spectrum bidding proposal by Tata Teleservices but RNT
and Soonawala made changes to the board agenda item because they were not convinced by the strategy. xix Mistry

Page 3 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

argued that this showed that matters could not be taken to the board of Tata Sons without the pre-clearance of RNT
and Soonawala.xx

Role of the Board

The other main thrust of Mistry’s contention before the tribunals was that the board of Tata Sons (see Exhibit 1) did
not act in an independent manner and the powers granted to Tata Trusts under articles of association of Tata Sons
posed governance challenges and harmed the interests of Tata Sons and its minority shareholders.

In 2000,2 Tata Sons, with the consent of SP Group, amended its articles of association to empower Tata Trusts to
nominate 1/3 of the directors on the board of Tata Sons as long as it held more than 40% shares in Tata Sons. xxi
Further, Article 121 stipulated that matters which were required to be decided by majority of the board would
require affirmative vote of majority of the directors nominated by Tata Trusts. 3 During RNT’s tenure, RNT was also
the head of Tata Trusts. When he retired, RNT remarked that “in future with the chairman of the Trust and the
company not likely to be the same individual, it would be desirable to enter into an agreement between the major
Trusts and the company to clarify the involvement of Tata Trusts envisaged under Article 121”. xxii This led to the
introduction of Article 121A (Appendix 1) in 2014, which provided a list of negotiated matters which had to be
approved by the board of Tata Sons. Mistry felt that while the articles were well-intentioned, they were abused in
practice.xxiii He stated that the articles were “interpreted as a means of requiring prior consent and affirmation even
as to whether matters could be brought before the Board of Directors not only of Tata Sons Limited but also of the
Tata Group Companies, which was never the intention”.xxiv Mistry argued that such pre-consultation and pre-
approval undermined the institution of board of directors. xxv Nevertheless, Mistry and his team wrote long and
detailed reports about every operating company and shared them with the board and the trustees.xxvi These reports
allegedly did contain information about the major decisions taken by the group but was buried inside extensive
information about the companies which made it difficult for the directors and trustees to go through prior to the
board meeting.xxvii The trustees were said to have commented that only critical developments should be detailed in
the reports to them.xxviii

As per the company laws in India, all directors of a company are expected to exercise independent judgment and act
in the interest of all the shareholders.xxix Mistry argued that the articles which allow nominee directors of Tata Trusts
the right to veto decisions result in directors acting at the behest of Tata Trusts without exercising independent
judgement and against the interest of Tata Sons and its other shareholders. For instance, in a board meeting where
the Welspun acquisition decision by Tata Power was discussed, the nominee directors Nitin Nohria and Vijay Singh
repeatedly left the meeting to take instructions from RNT, implying that RNT was controlling the conduct of the
nominee directors.xxx Rebutting this characterization, Tata Trusts and the nominee directors clarified that it was only
necessary because Mistry brought the Welspun transaction before the Tata Sons’ board as a fait accompli after
already announcing the acquisition to the press via Tata Power. xxxi This was disregarding the articles which required
Tata Sons’ board approval as well as approval of the majority of trust nominated directors. This was the reason why
the nominee directors had to consult with RNT to find appropriate language to record in the minutes of the meeting.
In turn, Mistry responded that the transaction was mentioned in an earlier note circulated to the directors and no
one had raised concerns then. Tata Sons also stated that as per company law, it is the duty of directors to act in
accordance with the articles of association of the company.xxxii

2 In 2000, an amendment was made to the Companies Act, 1956 to allow trustees to directly exercise the voting rights as shareholders; until then,
a trust could exercise its right as a shareholder only through a public trustee appointed by the government. The amendment to the articles of
Tata Sons was brought in after this amendment to the law. It is also to be noted that Tata Trusts was allowed to hold shares in a company as an
exception by the government since public charitable trusts are generally prohibited from holding shares in for-profit companies.
3 In 2000, when the right to nominate directors was bestowed on Tata Trusts, the amendment to Article 121 required all trust nominated directors

to affirm any decision required to be decided by the board. In 2014, after Cyrus Mistry became chairman, this clause was amended to require
majority of the trust nominated directors to affirm decisions of the board.

Page 4 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

Mistry also cited his removal as chairman as another instance of directors acting at the behest of RNT without
exercising independent judgment. In the board meeting, he was removed without any discussion or explanation
even though some of the directors who voted to remove him had earlier commended his performance and given
him a raise a few months ago.xxxiii Further, he argued that three of the directors had only just been inducted into the
board, which meant it would have been difficult for them to assess his performance as chairman. xxxiv

In response, Tata Sons argued that Mistry had attempted to move away from well-established practices of Tata
Group in relation to board appointment (see Exhibit 2):

Exercising the executive power, Mr. Cyrus did not appoint any directors of Tata Sons on the Boards of other
Tata Companies, as was the practice in the past. This systemic dilution weakened the bind through which
Tata values, ethos, governance principles, group strategies were to be implemented across the Tata Group
Companies. In most of the cases, Mr. Cyrus ensured that he was the only director who was common to Tata
Sons and Tata group companies, effectively making himself the only “channel” between the company and
Tata Group Company, Mr. Cyrus' actions deliberately weakening the Tata group structure, which was
inimical to the company interest, therefore, the mismanagement, if any, it has been perpetrated by Mr.
Cyrus, not by Tata Trusts.xxxv

Role of the Tata Trusts

Mistry argued that RNT used the provisions of the articles and the lack of clarity on the role of Tata Trusts to
constantly interfere with the decision making of Tata Sons and Tata group companies, despite promising Mistry that
he would be given a free hand to run the Tata Group. Mistry argued that Nitin Nohria, the trust nominated director,
himself acknowledged the issue. He cited the emails from Nohria:xxxvi

I can certainly empathize with your frustration about what items can be dealt with by the company board
and what require prior approval of the trusts…All of these issues raise concerns that I think we need to
surface and address. Separation of leadership of the Tata Trust and the company is more significant than
anyone has fully comprehended or internalized. Even though the Memorandum and Articles of Association
provide some guidelines, they have not been translated into operating practices that have everyone's buy-
in…

Mistry pointed out that as executive chairman of Tata Sons, he wore two hats – as a director of Tata Sons and a
director on the board of Tata companies. He further argued that as a director on the board of a Tata company, “he
owes fiduciary duty to all shareholders to ensure that the board of the Tata Company exercises independent
judgement and is not influenced by the views solely of its promoter and principal shareholder.” xxxvii For instance, he
pointed out that the articles of Tata Power did not confer special rights on Tata Sons to pre-approve transactions
that were to be decided by the board of Tata Power. xxxviii

There was also a degree of uncertainty regarding the extent to which price sensitive information relating to listed
group companies could be shared with certain shareholders to the exclusion of other shareholders. This was relevant
to the extent information had to be shared with Tata Sons and even more so with Tata Trusts. Mistry had sought
multiple legal opinions to clarify the extent to which information can be shared with Tata Sons and Tata Trusts. A
legal opinion that Mistry had sought permitted sharing of information with Tata Sons but not with Tata Trusts. xxxix
The rationale of the legal expert was as follows:

[I]t was fine for operating companies to share information with Tata Sons, because before planning
fundraising exercises and strategic decisions, the role of Tata Sons was significant. More importantly, the
group companies had come to depend on Tata Sons for talent, personnel and support in times of need.
Therefore, as long as Tata Sons did not trade in these shares while it had such information, it was essential
for companies such as Tata Motors, Tata Steel and others to remain transparent and even share future

Page 5 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

plans with Tata Sons. However, with the Tata Trusts the equation was not quite the same. Any information
passed about these listed entities through Tata Sons or directly to the Tata Trusts was against the rules. xl

However, the legal opinion allowed for sharing of information with select trustees – RNT and Soonawala – since
“their long-standing experience and expertise in the running of the Tata Group companies can mean that Tata Sons
and Tata Group companies can stand to gain from such experience” xli and required the reasons to be recorded. On
the basis of this and the feedback from Nitin Nohria,xlii Mistry formulated a draft governance framework seeking to
define the roles played by each Tata entity — the trusts, Tata Sons and the operating firms — in the running of the
group.xliii It was reported that the draft governance framework stated that while Tata Trusts as the largest
shareholder will have the ‘right to visibility’ of Tata Sons’ strategy to ensure that it was aligned with their objectives
in terms of value, returns, risk and governance,xliv Tata Trusts should trust the judgment of their appointees on the
board. Additionally, the draft framework recommended restricting the role of Tata Sons’ board to providing feedback
rather than approving or disapproving the decisions of Tata companies.xlv Mistry’s abrupt removal precluded him
from presenting the draft governance framework to the board of Tata Sons.

THE NCLT ORDER

NCLT rejected Mistry’s claims of interference by Tata Trusts in the running of Tata Sons and held Mistry’s removal
to be valid since it was within the rights of the majority shareholder and the board of directors to select and remove
the chairman. Specifically, on the question of interference by RNT, it was found that he had only offered his inputs
when sought for or when the articles provided the rights to the Trusts. In relation to the concerns about sharing of
sensitive information of listed companies with select trustees, NCLT concluded that it was appropriate for majority
shareholders to seek information required to advise nominee directors, as long as the sensitive information was not
misused.xlvi NCLT commented:

When majority shareholder is there and majority shareholder himself is not a director and majority
shareholder nominate[s] someone as director, it is obvious such majority shareholder must have prior
information to take an informed decision to advise his nominee director to take a right call on the said point.
The same is happening here. In fact, these petitioners [SP Group] as well as other shareholders of Tata Sons
unanimously approved Article 121(A) to provide the information of not only Tata Sons but also group
companies prior to taking any decision even by the group companies. Such being the case, there is no point
in saying that Mr. Tata has kept on interfering with the affairs of the company. It cannot be said as
interference, in fact, it is nothing but an exercise of their right by virtue of the Article and by virtue of the
majority they have been enjoying in the company.

The next important consideration was whether granting veto rights to the majority shareholders (Tata Trusts) over
specified matters was oppressive or prejudicial to the interest of minority shareholders (Mistry family). It was argued
by Mistry that recent changes in company law regulations created a paradigm shift away from the old concept of
majority shareholders conducting the affairs of the company. xlvii With the inclusion of the concept of independent
directors and creation of a legal obligation on directors to protect the interest of all stakeholders, he argued that the
law had shifted away from ‘corporate democracy’ embodied by the will of the majority to a more inclusive scheme
of ‘corporate governance’ where the interests of all were safeguarded. Under this premise, Mistry argued that the
specific articles of Tata Sons under contention were counterproductive to corporate governance. NCLT rejected this
argument:

[I]t is inconceivable to even contemplate that by virtue of introduction of corporate governance, corporate
democracy is taken to the back seat…Governance is only a part of democracy...If you go little bit backwards,
election of somebody to work on behalf of them has come into existence to give an ease to run an
institution. It is not that, since somebody is elected to represent them and [are] safeguarding their interest,
the persons selecting the elected [has to remain silent even when their interest is jeopardized]… If at all

Page 6 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

corporate governance alone is the criteria to govern the company…then it is nothing but putting the
aggregate interest into somebody's hands upon which majority has no control.xlviii

NCLT also underplayed the extent to which the affirmative voting right of nominee directors would give control to
Tata Trusts:

In Tata Sons, the majority shareholders, i.e., Tata Trust instead of electing majority [of] Directors, they have
come out with a different method of controlling the company. Instead of bringing entire board from their
side, Tata Trusts inserted a provision to have 1/3rd of Directors on the Board with an affirmative vote so
that no resolution would be passed without their vote. Instead of having positive control over the company,
for their own reasons, they have opted for a negative control over the company by having affirmative vote.
Though the results of these two ways of control are not exactly the same, but it is for sure that no resolution
would be passed unless majority accepts such resolution. The Trusts otherwise can have full control over
the company by virtue of their majority; but because of this arrangement, they have limited their control
through negative voting to the resolutions that come to Tata Sons Board. xlix

In conclusion, NCLT rejected the petition filed by Mistry and held the actions taken by Tata Sons and its board to be
valid. In its final remarks, NCLT clarified the fundamental difference between the hats worn by Mistry and RNT as
chairman of Tata Sons:

The very idea Mr. Cyrus assumed in his mind that he was given a free hand to run the affairs of the company
is incongruous to corporate governance and corporate democracy…. Perhaps since he saw Mr. Tata working
as Executive Chairman, he might have [thought] that he would exercise the powers as Mr. Tata exercised
forgetting the fact that Mr. Tata at that point of time had two hats, one, as the Chairman of Tata Trusts
holding majority shareholding of Tata Sons, two, as the Executive Chairman of the company, but that is not
the case with Mr. Cyrus. By the time when Mr. Cyrus came, he came as an employee to the company not
with another hat that Mr. Tata had while he was working as Executive Chairman. l

There was also an issue raised by Mistry regarding the conversion of Tata Sons (with majority shareholder approval)
in 2017 from a public limited company to a private limited company. Unlike public companies, private companies
are not required to appoint independent directors, can restrict transferability of shares, and generally have fewer
governance requirements. This was also argued as an instance of oppression of minority shareholders but the NCLT
did not accept this line of reasoning and found the conversion of Tata Sons to a private company to be valid.

THE NCLAT ORDER

Aggrieved by the order passed by NCLT, Mistry appealed to the National Company Law Appellate Tribunal (NCLAT)
to reconsider the matter. Mistry also sought a reversal of the decision of Tata Sons to convert itself into a private
limited company.

NCLAT interpreted the relevance of the articles of association and the extent of interference by RNT and other
trustees in a different light and concluded that the affairs of Tata Sons were being conducted in a manner prejudicial
to the interests of Tata Sons and minority shareholders. NCLAT observed that for any policy decision to be taken in
relation to Tata Sons or Tata Group Companies, affirmative vote of the trust nominated directors was mandatory.li
This implies that the affirmative vote has an overriding effect and renders the majority decision (of the board)
subservient to it.lii NCLAT noted multiple correspondences from Mistry to RNT and trust nominated directors
wherein he highlighted the issues at operating companies and the loss that could accrue if steps were not taken. liii
NCLAT further noted that despite such communication, the board of Tata Sons did not take any decision to revive or
restructure. For this failure, the board of directors, especially the nominee directors without whose affirmative vote
no decision can be taken, should be held responsible. liv On this basis, NCLAT concluded that it was not appropriate
for Tata Sons and its board to claim that loss in operating companies was due to mismanagement by Mistry.lv

Page 7 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

NCLAT also noted the multiple emails and letters from RNT to Mistry which indicate the extent to which Mistry was
curtailed by the articles and was subject to interference in decision making. NCLAT further stated that “the
consecutive chain of events coming to the fore from the correspondence amply demonstrates that impairment of
confidence with reference to conduct of the affairs of company was not attributable to… Mr. Cyrus Pallonji Mistry
but to unfair abuse of powers on the part of other Respondents [Tata Trusts, Tata Sons and its directors].” lvi

Finally, on the question of the board of directors voting to remove him, the tribunal noted that there was no previous
record of either the board of directors or the Tata Trusts expressing displeasure about the performance of Mistry
and thus the removal was concluded as a decision taken by RNT. lvii

In light of the affirmative vote provided to the trust nominated directors and the sequence of events leading to
Mistry’s dismissal, NCLAT came to the conclusion that Tata Sons was being run in a manner prejudicial to the
interests of the minority shareholders.

The NCLAT set aside the appointment of Natarajan Chandrasekaran and restored Mistry as the executive chairman
of Tata Sons and on the boards of Tata companies from which he was removed. The NCLAT also ordered RNT and
other trustees to not take any decision in advance which required the majority decision of the board. The order also
ruled that conversion of status of Tata Sons was invalid and it would remain a public limited company. The order
also held that Tata Sons could invoke Article 75 only under exceptional circumstances after providing reasons. This
article allowed the company, by a special resolution, to force any shareholder to transfer their shares. However, at
the request of Tata Sons, the tribunal stayed its order to restore Mistry as executive chairman of Tata Sons for 4
weeks to allow an appeal.

APPEAL TO SUPREME COURT

After the NCLAT order ruled in favor of SP Group, Mistry clarified that he does not seek to come back as executive
chairmanship of Tata Sons. In a statement, he commented: lviii

I intend to make it clear that despite the NCLAT order in my favour, I will not be pursuing the executive
chairmanship of Tata Sons, or directorship of TCS, Tata Teleservices or Tata Industries. I will however
vigorously pursue all options to protect our rights as a minority shareholder, including that of resuming the
thirty-year history of a seat at the Board of Tata Sons and the incorporation of the highest standards of
corporate governance and transparency at Tata Sons… In the last three years, both in conduct and in their
statements to the world at large, the Tata Group’s leadership has shown scant respect for the rights of
minority shareholders. It is time the Group’s management introspects and reflects on its conduct as it
embarks on future actions.

Tata Sons filed an appeal before the Supreme Court of India, which stayed the NCLAT orders pending further review.
In its petition to the Supreme Court of India, Tata Sons stated:

NCLAT has, in one stroke of the pen, pulled down the governance and the corporate structure of the
appellant [Tata Sons], so painstakingly put together by its founders, in the spirit of trusteeship and
responsibility, in the course of the last one century…The judgment has torn apart the rights of majority
shareholders and directors enshrined under the articles and the 2013 Act and disenfranchised all other
shareholders of the appellant including the Tata Trusts.lix

Before the Supreme Court, Tata Sons challenged all the directions in the order passed by the NCLAT, including the
reinstatement of Mistry, the direction to trustees to not take decisions pertaining to Tata Sons, and the primary
finding of oppression and mismanagement. Tata Sons also challenged the finding of NCLAT regarding the conversion
of Tata Sons from a public company to a private company. In turn, the SP Group, while maintaining that Mistry does
not seek to be reinstated as executive chairman, appealed to the Supreme Court for proportional representation in

Page 8 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

the board of Tata Sons and for similar affirmative rights to its nominee directors. The latter reflected a shift in SP
Group’s earlier claims given wherein they had requested the company law tribunals to remove the affirmative voting
rights granted to trust nominated directors. On the basis of these claims from both sides, the Supreme Court framed
five legal issues for consideration. The issues pertained to: (i) finding of oppression and mismanagement by NCLAT;
(ii) validity of reliefs granted, especially the reinstatement of Mistry; (iii) validity of the injunction granted against
the use of Article 75; (iv) validity of affirmative voting rights under Article 121 and the direction to RNT to not decide
issues that are to be considered by board of Tata Sons; (v) validity of conversion of Tata Sons to a private company.
However, before Supreme Court could issue its final judgment on these questions, a number of practical issues
cropped up in the interim.

Interim Order on Pledge of Shares

In September 2020, SP Group announced its intention to exit Tata Sons after the Supreme Court of India restrained
the Group from further pledging of its shares in Tata Sons. The SP Group had sought to pledge part of its 18.4% stake
in Tata Sons with a Canadian investor to raise money to address the liquidity crisis at different SP Group companies
following the COVID pandemic. Tata Sons had moved the Supreme Court to prevent SP Group from creating any
direct or indirect pledge of shares in Tata Sons arguing that the articles of Tata Sons restricted the pledging of shares.
They offered to buy the shares from SP Group if the latter had a need for money. lx Terming the SP Group’s move as
“mischief”, the legal counsel of Tata Sons reportedly told the Court:

In the event of any default by the Mistry firms, the banks will place the pledged shares on the block for sale
and if any third party offers to pay a premium, Tata Sons would have no choice but to match the higher
price. Tomorrow, if Warren Buffett comes and tries to buy, we will have to pay 30% higher… lxi

Following the interim ruling of the Supreme Court, the SP Group decided to end its seven-decade-long partnership
with the Tata Group. In its statement, the SP Group said:

Tata Sons has amplified its institutional efforts to suppress and inflict irreparable harm on the SP Group, in
the midst of a global crisis triggered by the COVID Pandemic. The 150-year-old SP Group – is the second
largest construction group in the country, executing projects of national significance in India and abroad.
The Mistry family were in the midst of raising funds against the security of their personal assets to meet the
crisis arising from the global pandemic. This move was undertaken to protect the livelihoods of its 60,000
employees and over 100,000 migrant workers. The action by Tata Sons to block this crucial fund raise,
without any heed for the collateral consequences is the latest demonstration of their vindictive mind-set.
lxii

As per the articles of association of Tata Sons, an existing shareholder seeking to sell its shares needs to notify the
company. Tata Sons had up to three months to find a preferred buyer, among existing shareholders or outside, who
were willing to buy the shares at a fair value, that was to be determined by the directors of Tata Sons based on
annual audited accounts. SP Group could sell to a third party only if Tata Sons failed to find a buyer. Even then, the
board of directors of Tata Sons could refuse the transfer on certain grounds such as if the post-transfer shareholding
of the buying shareholder exceeds 5% of the share capital, or if the transfer could lead to a change in board
composition or control that would be prejudicial to the interests of Tata Sons or its other shareholders.

The valuation of Tata Sons was expected to be a complex exercise given the need to value the Tata Brand and the
company’s holdings in a host of unlisted group companies, and this led to a wide range of estimates on what the SP
Group’s shares would be worth. It was also not clear how the Tata Sons would fund the purchase of the SP Group’s
stake because both Tata Trusts and the subsidiaries of Tata Sons were prohibited by law from buying SP Group’s
stake in Tata Sons.lxiii

Page 9 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

Settlement Proposal

Following their stated intention to exit Tata Sons, the SP Group submitted a settlement proposal before the Supreme
Court. SP Group estimated the value of its 18.4% stake in Tata Sons at Rs. 1,75,000 crore ($23.5 billion). In lieu of
their shareholding in Tata Sons, SP Group sought for a pro-rata stake in Tata Group’s listed companies (see Exhibit
3 for estimates). Further, they also sought a settlement in cash or marketable securities for its share in the unlisted
Tata Group companies (see Exhibit 4 for a list of companies) and the Tata brand, after adjusting for net debt. The
brand value was estimated at $20 billion based on a report by Brand Finance, lxiv which was also published on the
Tata website.lxv

According to SP Group, this settlement plan of pro-rata separation would be fair and equitable to all stakeholders,
minimize any dispute on valuation and ease pressure on Tata Group to raise large quantum of debt. lxvi Anil Shanghvi,
chairman of ICAN Investment Advisors, commented:

Tata Sons, after it became a private limited company, has all the traits of a partnership. With a partner [SP
Group] wanting separation, Tata Sons could look at splitting its assets and liabilities vertically, in proportion
to the partner’s share in the company.lxvii

Shriram Subramanian, the founder of InGovern Research Services, commented:

It looks unlikely that Tatas will readily agree to this proposal, [especially since Tata Sons’ equity in the group
companies would] reduce considerably leaving the listed companies susceptible to hostile takeovers.lxviii

Mukund Rajan, a former TAS veteran and member of Mistry’s Group Executive Council, echoed similar sentiments.
He emphasized the need for a fundamental transformation in the ownership and governance structure of the Tata
Group to avoid such problems in the future:

The battle between the two most significant shareholders in Tata Sons, the apex investment holding
company of the Tata group, has generated intense stakeholder scrutiny of governance within the group and
eroded the morale within its employee base, with profound, long-term implications for the Tata brand. The
shareholder dispute needs to be urgently resolved, and the roles the Tata Trusts and Tata Sons envisage for
themselves as owners and managers need to be clarified. One possible way out may ultimately be to
publicly list Tata Sons, allowing its ownership to devolve on the Indian public markets and the people of
India. In a way, this will honour JRD Tata’s famous articulation of the trusteeship concept at Tatas. lxix

Supreme Court Judgmentlxx

The Supreme Court ruled in favor of Tata Sons and Tata Trustees on all the five issues. The court noted that while
NCLT had recorded detailed facts and findings in relation to each of the instances of oppression and mismanagement
alleged by Mistry, NCLAT recorded its findings only in relation to removal of Mistry, affirmative voting rights granted
to nominee directors and conversion of Tata Sons to a private company. This was relevant as it meant that all the
other findings of facts recorded by NCLT, except for these limited facts that NCLAT dealt with, were seen as final by
the Supreme Court. Therefore, in relation to the first issue on oppression and mismanagement, Supreme Court only
had to determine if removal of Cyrus Mistry as chairman met the required threshold. In this context, the court sided
with Tata Sons and concluded that removal of a director cannot be considered oppressive or prejudicial to minority
shareholders. On the second, third, and fifth issues, the Supreme Court ruled against NCLAT findings by concluding
that the tribunal had either gone beyond its legal powers or had interpreted the standards incorrectly. Thus, the
reinstatement of Cyrus Mistry and injunction on Article 75 were held to not be valid, while the conversion of Tata
Sons to a private company was held to be valid.

Page 10 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

The most important issue pertained to the role of nominee directors and the implication of affirmative rights granted
to nominee directors nominated by certain category of shareholders. As noted earlier, NCLAT had significantly relied
on the affirmative rights provided to trust nominated directors in finding that affairs of Tata Sons were being
conducted against the interests of minority shareholders (SP Group). The Supreme Court wondered if this was at all
a “fight on principles” given the change in stance by SP Group from wanting affirmative voting rights removed
altogether to wanting affirmative rights for their nominee directors too.lxxi Nevertheless, the Supreme Court opined
on the validity of the affirmative rights granted and its impact on the fiduciary duties of nominee directors. The SP
Group again argued that directors had fiduciary obligations to act independently in the best interests of the company
and not in the interests of shareholders nominating them. It was argued the affirmative voting rights and the implied
pre-consultation/pre-clearance requirement prevented the directors from discharging their fiduciary duties. Noting
that affirmative voting rights is a globally accepted norm,lxxii the court went on to clarify the nature of fiduciary duties
of nominee directors:

Coming to the argument revolving around the duty of a Director, it is necessary that we balance the duty
of a Director, under Section 166(2) to act in the best interests of the company, its employees, the
shareholders, the community and the protection of environment, with the duties of a Director nominated
by an Institution including a public charitable trust. They have fiduciary duty towards 2 companies, one of
which is the shareholder, which nominated them and the other, is the company to whose Board they are
nominated. If this is understood, there will be no confusion about the validity of the affirmative voting
rights. What is ordained under Section 166(2) is a combination of private interest and public interest. But
what is required of a Director nominated by a charitable Trust is pure, unadulterated public interest.
Therefore, there is nothing abhorring about the validity of the affirmative voting rights.lxxiii

The court also used the creation of the concept of independent directors to infer the obligations for other types of
directors:

In fact it is a paradox to claim that by virtue of Sub-sections (2) and (3) of Section 166, every Director of a
Company is duty bound to act in good faith in order to promote the objects of the company for the benefits
of its members and in the best interests of all the stakeholders as well as environment and a duty to exercise
independent judgment, and yet mandate the appointment of independent Directors...If all Directors are
required…to exercise independent judgment, we do not know why there is a separate provision in Section
149(4) for every listed Public Company to have at least 1/3rd of the total number of Directors as independent
Directors. We do not also know whether the prescription in Section 149(4) is a tacit acknowledgment that
all the Directors appointed in a General meeting under Section 152(2) may not be independent in practice,
though they may be required to be so in theory.lxxiv

The Supreme Court also rejected any concerns about the implications of imposing dual obligations on nominee
directors:

The question as to (i) what is in the interest of the company, (ii) what is in the best interest of the members
of the company as a whole and (iii) what is in the interest of a nominator, all lie in locations whose borders
and dividing lines are always blurred. If philosophical rhetoric is kept aside for a moment, it will be clear
that success and profit making are at the core of business enterprises. Therefore, the best interest of the
majority shareholders need not necessarily be in conflict with the interest of the minority or best interest
of the members of the company as a whole, unless there is siphoning of or diversion. Such a question does
not arise when the majority shareholders happen to be charitable Trusts engaged in philanthropic
activities.lxxv

Consequently, the Supreme Court rejected the findings of the NCLAT in linking the affirmative voting rights to
oppression and mismanagement. The court also rejected, without much discussion, allegations around pre-
consultation or pre-clearance requirement and RNT’s influence over Tata Sons’ board. The court also did not grant

Page 11 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

proportionate representation on Tata Sons’ board that was sought by the SP Group since there was no legal basis
for such a demand. While the Supreme Court ruled in favor of Tata Sons and Tata Trusts on all the issues identified,
the court did not issue any finding or direction in relation to the settlement proposal submitted by the SP Group
during the hearings. One of the lawyers representing the Tata Group clarified that settlement was not an issue in
the present litigation and that any settlement needs to be arrived at between the relevant parties by consensus.lxxvi

Page 12 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

Exhibit 1
Members on the Board of Directors – Tata Sons (2016 to 2019)

Name (Tenure) Remarks

Ratan Tata Director (1974-1992); Chairman (1992-2012; 2016-2017); Chairman Emeritus
(1974-2012) (2016-17) (C) (2012-2016; 2017-2019)
Farida Khambata (2015- Global strategist, Cartica, an investment advisory firm specializing on emerging
present) (ID) markets.
Ajay Piramal (Aug 2016 – Chairman, Piramal Group and Shriram Group.
present) (ID)
Venu Srinivasan (Aug 2016 – Chairman, Sundaram Clayton & TVS Motor Company; Trustee, Tata Trusts since
present) (NE-NID) 2016; Vice-Chairman, Tata Trusts since 2018.

Vijay Singh (June 2013 – July Formerly Secretary (Defence), Government of India.
2018) (ND)
Ronen Sen (April 2015 – April Formerly Indian Ambassador to United States.
2019) (ID)
Nitin Nohria (Sep 2013 – Aug Dean, Harvard Business School
2018) (ND)
Amit Chandra (Aug 2016 – Managing Director, Bain Capital
Feb 2019) (ND)
Ishaat Hussain (ED) (1999- Former CFO of Tata Steel
2017)
Cyrus Mistry (2006 – Oct Director (2006-2011); Vice-Chairman (2011-2012); Chairman (2012-October 2016)
2016) (C)
N Chandrasekaran (Oct 2016 Chairman (since February 2017); CEO of Tata Consultancy Services (2009-2017)
– present) (C)
Ralf Speth (Oct 2016 – CEO, Jaguar & Land Rover since 2010.
present) (NE-NID)
Saurabh Agarwal (Nov 2017 – Group Chief Financial Officer since July 2017.
present) (ED)
Bhaskar Bhat (Nov 2017 – Managing Director, Titan (2002-2019)
present) (NE-NID)
Harish Manwani (May 2018 – Former COO, Unilever.
present) (ID)
Source: Company Website; Author research

(ID: Independent Director, ED: Executive Director, C: Chairman, ND: Nominee Director; NE-NID: Non-Executive-Non-Independent Director)

Page 13 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

Exhibit 2
Common Directors at Tata Sons and Operating Companies

Tata Sons Tata Tata Steel Tata Titan Tata Power Tata
Consultancy Motors Consumer
Date Services Products

September 2012 RNT, IH, CM RNT, IH, RNT, CM IH RNT, CM, RG CM, RNT,
CM RK, FK, AR
September 2016 CM, IH CM, IH CM None CM CM
December 2019 NC NC, SA NC, RS BB NC, SA NC
Legend: RT: Ratan Tata; CM: Cyrus Mistry; IH: Ishaat Hussain; NC: N Chandrasekharan; SA: Saurabh
Agarwal; RS: Ralf Speth; RG: R Gopalakrishnan; RK: R Krishna Kumar; FK: FK Kavarana; AR: Arunkumar
Gandhi

Source: Company annual reports; MCA

Exhibit 3
Implication of Separation Proposal on Listed Group Companies

Tata Sons SP Group

Group Company Stake (%) Value (INR Proportionate Value (INR
crore) Stake (%) crore)
Tata Consultancy Services 72.1 711,760 13.2 130,750
Titan 20.8 21,799 3.8 4,004
Tata Motors 39.5 17,213 7.3 3,162
Tata Steel 32.9 15,041 6.0 2,763
Tata Consumer Products 29.4 13,316 5.4 2,446
Tata Communications 48.9 12,407 9.0 2,279
Trent 32.5 7,748 6.0 1,423
Voltas 26.6 6,193 4.9 1,138
Tata Power 35.3 5,872 6.5 1,079
Indian Hotels 40.8 4,696 7.5 863
Tata Elxsi 42.2 3,967 7.8 729
Tata Investment Corporation 73.4 3,129 13.5 575
Tata Chemicals 28.5 2,368 5.2 435
Tata Motors DVR 5.3 148 1.0 27
Total 825,657 151,673

Source: Bloomberg Quint

Page 14 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

Exhibit 4
Prominent Unlisted Entities Held by Tata Sons (Subsidiaries and Joint Ventures)

1. Tata SIA Airlines Limited (Vistara)

2. Air Asia (India) Limited (Air Asia)
3. Tata Sky Limited (Tata Sky)
4. Tata Housing Development Company Limited (Tata Housing)
5. Tata Realty and Infrastructure Limited (Tata Realty)
6. Infiniti Retail Limited (Croma)
7. Tata Capital Limited (Tata Capital)
8. Tata Industries Limited (Tata Cliq, Tata Health, Flisom, Tata ClassEdge, Landmark etc.)
9. Tata AIA Life Insurance Company Limited (Tata AIA)
10. Tata AIG General Insurance Company Limited (Tata AIG)

Source: Author research; list not exhaustive

Appendix-1

Article 121-A of Tata Sons’ Articles of Association

The following matters shall be resolved upon by the Board of Directors:

(a) A five-year strategic plan that should include an assessment of the proposed strategic path of the Company,
business and investment opportunities, proposed business and investment initiatives and a comparative analysis of
similarly situated holding companies, and any alterations to such strategic plan;
(b) An annual business plan structured to form part of the strategic plan, that should include proposed investments,
incurring of debts, debt to equity ratio, debt service coverage ratio, projected cash flow of the Company and any
alterations to such annual business plan;
(c) The incurring or renewal of any debt or other borrowing by the Company, which debt or borrowing causes the
cumulative outstanding debt of the Company, to exceed twice its net worth or which debt/borrowing is incurred/
renewed at a time when the cumulative outstanding debt of the Company has already exceeded twice its net worth,
if not already approved as part of the annual business plan;
(d) Any proposed investment by the Company in securities, shares, stocks, bonds, debentures, financial instruments,
of any sort or immovable property of a value exceeding Rs. 100 Crores if not already approved as part of the annual
business plan;
(e) Any increase in the authorized, subscribed, issued or paid-up capital of the Company and any issue or allotment
of shares by the Company (whether on a rights basis or otherwise);
(f) Any sale or pledge, mortgage or other encumbrance or creation of any right or interest by the Company of or over
its shareholding in any Tata Company or of or over any part thereof, if not already approved as part of the annual
business plan;
(g) Any matter affecting the shareholding of the Tata Trusts in the company or the rights conferred upon the Tata
Trusts by the Articles of the Company or the shareholding of the Company in any Tata Company if not already
approved as part of the annual business plan;
(h) Exercise of the voting rights of the Company at the general meetings of any Tata Company, including the
appointment of a representative of the Company under Section 113(1)(a) of the Companies Act, 2013 in respect of
a general meeting of any Tata Company and, in any matter concerning the raising of capital, incurring of debt and
divesting or acquisition of any undertaking or business of such Tata Company, instructions to such representative on
how to exercise the Company’s voting rights.
Explanation: the term “Tata Company” used in this article shall, as the context requires, mean each or any of the
following companies”.

Page 15 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

Tata Consultancy Services Ltd., Tata Steel limited, Tata Motors Limited, Tata Capital Ltd., Tata Chemicals Ltd., Tata
Power Company Ltd., Tata Global Beverages Ltd., The Indian Hotels Company Ltd., Trent Limited, Tata Teleservices
(Maharashtra) Limited, Tata Industries Limited, Tata Teleservices Limited, Tata Communications Limited, Titan
Company Limited and Infiniti Retail Limited and any other Company in which the Company (or its subsidiaries) holds
twenty percent or more of the paid up share capital and whose name is notified in writing to the Company by the
Directors nominated under Article 104B”

Source: MCA filings

ENDNOTES:
i “Tata-Mistry verdict highlights: Ratan Tata hails Supreme Court ruling; experts react”, CNBC, March 26, 2021,
<https://www.cnbctv18.com/business/companies/tata-sons-vs-cyrus-mistry-case-news-latest-updates-supreme-court-cji-sa-bobde-set-to-
deliver-verdict-today-8730371.htm>
ii
“Full Text of Cyrus P Mistry's Statement Saying My Conscience Is Clear”, Businessworld, March 30, 2021,
<http://www.businessworld.in/article/Full-Text-Of-Cyrus-P-Mistry-s-Statement-Saying-My-conscience-Is-Clear/30-03-2021-385144/>
iii Cyrus Investments Private Limited & Anr. V Tata Sons Limited & Ors., National Company Law Tribunal, Mumbai, C.P. No. 82(MB)/2016

(hereinafter “NCLT Order”), p 52.

iv Ibid.
v
NCLT Order, p 129.
vi NCLT Order, p 67.
vii NCLT Order, p 175.
viii
NCLT Order, p 176.
ix NCLT Order, p 158.
x NCLT Order, p 160.
xi NCLT Order, p 169.
xii
NCLT Order, p 166.
xiii
NCLT Order, p 168.
xiv Cyrus Investments Private Limited/Cyrus Pallonji Mistry v Tata Sons Limited & Ors., National Company Law Appellate Tribunal, New Delhi,

Company Appeal (AT) Nos. 254 & 268 of 2018 (hereinafter “NCLAT Order”), p 135.
xv Ibid.
xvi
Deepali Gupta, Tata vs Mistry: The Battle for India’s Greatest Business Empire, (Juggernaut Books 2019), p 31. (hereinafter “Deepali Gupta”),
p 159.
xvii NCLAT Order, p 134.
xviii NCLT Order, p 133-134.
xix Ibid.
xx
Ibid.
xxi Article 104 B of the Articles of Association of Tata Sons.
xxii NCLT Order, p 55.
xxiii Deepali Gupta, p 171.
xxiv
NCLAT Order, p 15.
xxv NCLAT Order, p.11
xxvi Deepali Gupta, p 155.
xxvii Ibid.
xxviii Ibid.
xxix Section 166, Companies Act, 2013.
xxx NCLT Order, p 49.
xxxi NCLT Order, p 57-58.
xxxii NCLAT Order, p 41-42
xxxiii
NCLT Order, p 38.
xxxiv Ibid.
xxxv NCLT Order, p 56-57.
xxxvi NCLT Order, p 120-121.
xxxvii NCLAT Order, p 20.
xxxviii
NCLAT Order, p 19.
xxxix Deepali Gupta, p 162.
xl Ibid.
xli Deepali Gupta, p 162-163.
xlii NCLAT Order, p 92.

Page 16 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.
 The House of Tata: Governance Challenges (B)

xliii “Cyrus Mistry sought to define roles of Tata entities in governance document”, Live Mint, December 22, 2016
<https://www.livemint.com/Companies/QvxxLH03geyoBVAy91W4XO/Cyrus-Mistry-sought-to-define-roles-of-Tata-entities-in-gove.html>
xliv Ibid.
xlv “Cyrus Mistry fired first shot at Ratan Tata? Mooted governance draft to restrict Tata Sons role”, Financial Express, January 19, 2017,

<https://www.financialexpress.com/industry/cyrus-mistry-fired-first-shot-at-ratan-tata-mooted-governance-draft-to-restrict-tata-sons-
role/513387/>
xlvi NCLT Order, p 164-165.
xlvii NCLT Order, p 213.
xlviii
NCLT Order, 239.
xlix NCLT Order, p 242.
l NCLT Order, p 352-353.
li NCLAT Order, p 140.
lii
Ibid.
liii NCLAT Order, p 131.
liv Ibid.
lv NCLAT Order, p 141.
lvi Ibid.
lvii NCLAT Order, p 109.
lviii “Full Text of Cyrus Mistry’s Statement Saying He Won’t Return As Tata Sons Chairman”, Bloomberg Quint, January 5, 2020,

<https://www.bloombergquint.com/business/full-text-cyrus-mistry-says-will-not-pursue-tata-sons-chairmanship>
lix “Tata Sons moves SC challenging NCLAT decision restoring Cyrus Mistry as executive chairman”, The Economic Times, January 2, 2020, <

https://economictimes.indiatimes.com/news/company/corporate-trends/tata-sons-moves-sc-against-nclat-order-on-cyrus-
mistry/articleshow/73066279.cms?from=mdr >.
lx “SP Group told to maintain ‘status quo’ on Tata Sons share pledge”. Business Line, September 22, 2020,

<https://www.thehindubusinessline.com/companies/tata-group-open-to-buy-mistry-groups-shares-to-aid-fund-raising/article32667751.ece>
lxi
“Tata vs Mistry: Tata Sons offers to buy SP Group’s stake in share pledge dispute”, Financial Express, September 23, 2020,
<https://www.financialexpress.com/industry/tata-vs-mistry-tata-sons-offers-to-buy-sp-groups-stake-in-share-pledge-dispute/2089419/>
lxii “Tata Sons tried to suppress, harm Shapoorji Pallonji Group”: Read the full statement by Mistry family’, Livemint, September 22, 2020,

<https://www.livemint.com/companies/news/-tata-sons-tried-to-suppress-harm-shapoorji-pallonji-group-read-the-full-statement-by-mistry-
family-11600789821723.html>
lxiii “Tata-Mistry: The Beginning of the End”, Bloomberg Quint, September 23, 2020, <https://www.bloombergquint.com/opinion/tata-and-

mistry-the-beginning-of-the-end>
lxiv “Tata vs Mistry case: Supreme Court adjourns hearing for a week”, Business Today, November 4, 2020,

<https://www.businesstoday.in/current/corporate/tata-vs-mistry-case-supreme-court-adjourns-hearing-for-a-week/story/421086.html>
lxv
“Tata tops Brand Finance Indian Ranking for 2020”, June 2, 2020, <https://www.tata.com/newsroom/business/tata-top-brand-india-2020>
lxvi “Mistry Family Proposed Share Swap To Separate From Tata Sons”, Bloomberg Quint, October 29, 2020,

<https://www.bloombergquint.com/markets/business/mistry-family-proposes-share-swap-to-separate-from-tata-sons>
lxvii
“Tatas can look at non-cash pact with SP Group: Experts”, Times of India, October 29, 2020,
<https://timesofindia.indiatimes.com/business/india-business/tatas-can-look-at-non-cash-pact-with-sp-group-
experts/articleshow/78921521.cms>
lxviii “Mistry’s Seeks $24 Billion of Shares in Tata Firms to Cut Ties”, Bloomberg Quint, October 30, 2020,

<https://www.bloombergquint.com/business/mistrys-seeks-separation-from-tata-valuing-stake-at-24-billion>
lxix “The true toll: Settling the Tata-Mistry dispute has given rise to a reckoning about the real cost of this conflict”, Economic Times, October 24,

2020, <https://economictimes.indiatimes.com//news/company/corporate-trends/the-true-toll-settling-the-tata-mistry-dispute-has-given-rise-
to-a-reckoning-about-the-real-cost-of-this-conflict/articleshow/78849089.cms>
lxx Tata Sons Private Limited & Ors. v Cyrus Investments and Ors., Supreme Court of India, Civil Appeal No. 440-445 of 2020, No. 13-14 of 2020,

No. 19-20 of 2020, No. 448-449 of 2020, No. 263-264 of 2020, No. 1802 of 2020 (hereinafter “Supreme Court Order”).
lxxi
Supreme Court Order, p 216.
lxxii Supreme Court Order, p 230.

lxxiii Supreme Court Order, p 233-234.

lxxiv Supreme Court Order, p 228-229.

lxxv
Supreme Court Order, p 235-236.
lxxvi“Supreme Court verdict in Tata-Mistry case will be guideposts for corporates in future, says Abhishek Manu Singhvi”, CNBC, March 26, 2021,

<https://www.cnbctv18.com/legal/cnbc-tv18-excl-supreme-court-verdict-in-tata-mistry-case-will-be-guideposts-for-corporates-in-future-says-
abhishek-manu-singhvi-8734381.htm>

(References from iii to lx were last accessed on June 24, 2020; references from lx to lxviii were last accessed on November 10, 2020; references
I, ii and lxxvi were last accessed on October 11, 2021)

Page 17 of 17

This document is authorized for use only in Prof. Joanna Mankad's Business Ethics and Corporate Governance -BECG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to
Jul 2022.