Companies

No quasi-partnership with Mistry family firms: Tata Sons in counter affidavit

Rajesh Kurup Mumbai | Updated on July 11, 2020 Published on July 11, 2020

Ratan Tata   -  PTI

Also denies in “toto” all allegations and averments submitted by Mistry in cross-appeal

Tata Sons, in its response to a petition filed by ousted Chairman Cyrus Mistry, said it did not enter any “quasi-partnership” with Mistry family firms and that it is not a two-group company. It also sought the dismissal of an appeal file by Mistry, terming it “meritless”.

“There are no such two groups and it is just a figment of appellants’ imagination,” Tata Sons said in its counter affidavit filed before the Supreme Court, on behalf of its chairman emeritus Ratan N Tata, said.

“The appellants realise that to support their case of quasi-partnership, they need to first identify the two sides among whom the so-called partnership exists. Since there are multiple shareholders in the company, the appellants have created their two-group theory arguing that Tata Sons is essentially a company comprising two shareholder groups: the 'Tata Group and the SP Group’," it said.

“The most glaring aspect of the appellants' ever-changing case, from what it was pleaded originally before the National Company Law Tribunal (NLCT), has been their case of 'quasi- partnership',” it added.

“Quasi-partnership is a relationship of personal character and good faith among the shareholders of a company, which is analogous to partners in a partnership. Quasi-partnership does not limit the relationship to documented written agreements but recognises action, conduct, mutual trust and confidence,” a source close to Mistry camp said, reacting to Tatas’ filings in the Supreme Court.

Tata also denied in “toto” all allegations and averments submitted by Mistry in the cross-appeal, including allegations of “interference” on various matters, and added that the cross-appeal is meritless and deserves to be dismissed.

“At this stage of my life and career, I would not like to either explain or defend my performance as chairman of Tata Sons and of other Tata companies whose board I have chaired during my tenure. It is for the companies and their stakeholders to judge,” the counter affidavit filed said.

The affidavit also stated that none of the alleged acts of oppression and mismanagement was ever raised by the Mistry earlier even “purported oppression and mismanagement relate to a period much prior (some as far back as 1993) to the date of institution of these proceedings in December 2016.

“The conduct of Cyrus Mistry and the narrative he has built to further his case is deplorable, intended to harm the company and its stakeholders and entirely personally motivated,” it said.

ALSO READ: Mistry wants SC to compare financials of Tata group during his tenure and now

Tata Sons was incorporated in 1917. The company was founded by late Jamsetji Tata and his family, and at this time Mistry family did not hold any shares of Tata Sons.

Pallonji S Mistry (Mistry’s father) and Sterling Investment Corporation (an appellant in the cross appeal) became shareholders of Tata Sons for the first time in 1965, more than 50 years after the incorporation of the company in 1917, it added.

Earlier on May 19, the apex court agreed to hear Cyrus Mistry’s petition seeking a “proportionate” representation for Shapoorji Pallonji Group (SP Group) on Tata Sons board.

ALSO READ: Apex court to hear Mistry’s plea for seat on Tata Sons board

The SP Group holds 18.4 per cent stake in Tata Sons, the parent company of all Tata Group firms. In October 2016, Mistry was removed as its Chairman and later a director.

Cyrus Mistry, in his petition filed before the Supreme Court, had stated that SP Group is the single largest shareholder in Tata Sons and it should receive a proportionate representation on the board.

ALSO READ: Mistry files appeal in Supreme Court; wants ‘anomalies’ in NCLAT order corrected

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Published on July 11, 2020
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