Cyrus Mistry ouster 'illegal,' Pallonji Group to take Tata Sons to court
- Pallonji Group, whose chief is the father of Mistry, had termed the ouster 'illegal.'
- As per Mistry's contract, the Tata Group should have given 15-day notice before sacking him.
The removal of Cyrus Mistry as chairman of the $100-billion Tata Sons has suprised many. But if reports are to be believed, the Tata Group may soon be looking at a long drawn out legal battle.
The Shapoorji Pallonji Group, whose chief is the father of Mistry, had termed the ouster "illegal" and has revealed that they will be approaching the Bombay High Court, NDTV had reported.
The Shapoorji Pallonji group controls nearly 18% of equity in Tata Sons directly and through trusts, which makes them the single largest individual shareholder of the salt-to-software conglomerate.
According to a report in The Financial Times, the Tata Group has already consulted several high-profile lawyers before Mistry's removal and seem to have a water-tight case. As per Mistry's contract, the Tata Group should have given 15-day notice before sacking him.
The board headed by interim chairman Ratan Tata is expected to find a new chairman within a 4-month period. Till now there has been no officail statement on why Mistry was given the boot but it is speculated that the board was not quite happy with the way the former Chairman was dealing with non-profit businesses.
Mistry, 48, replaced Ratan Tata, 78, as chairman in December 2012, was only the sixth group Chairman in nearly 15 decades and the first from outside the Tata family. He will remain a director of the individual companies, though his tenure as Chairman is the shortest so far at the group.