Cyrus Mistry says he's fighting the Tatas for 'rights' but not the chairman's seat

• Cyrus Mistry said he doesn't want to be the chairman of Tata Sons
  
• However, Mistry wants a seat on the board to protect minority shareholder rights.
  
• He also said that Ratan Tata questioning NCLAT's ruling was ‘brute majoritarianism' with no rights for minority stakeholders.
  

Tata Sons doesn't want Cyrus Mistry back at the helm of the company and it looks like Cyrus Mistry is backing down as well. In a statement on Sunday, Mistry declared that he wasn't looking to be chairman again — he just wants a seat on the board.

He wants a seat to ensure that minority shareholder rights are met. He noted that the petitions filed to the Supreme Court by TCS, Tata Teleservices and Tata Services last week were just another example of Tata Sons pushing their weight around.

"To dispel the misinformation campaign being conducted, recent media reports attributed to Ratan Tata and others questioning the NCLAT judgment ahead of an important hearing in the Supreme Court, profess an interpretation of corporate democracy as being one of brute majoritarianism with no rights for minority stakeholders," Mistry explained.

What's the big deal about minority shareholder rights?

A minority shareholder is anyone who has less than 50% shares of a company. While they cannot exercise control over the corporation they're still entitled to a few legal rights as per the Companies Act.

For instance, majority shareholders are bound by a fiduciary duty to act in the company's best interests and in compliance with the shareholders' agreement. Something that Mistry believes was violated by Tata Sons.

"This legal fight has never been about me. It has always been and will always be about protecting the rights of minority shareholders and upholding their right to demand a higher standard of corporate governance from controlling shareholders," he said.

Cyrus Mistry vs Tata Sons

Cyrus Mistry has been battling Tata Sons since he was ousted as chairman of the company back in 2013. Last month, the National Company Law Appellate Tribunal (NCLAT) court ultimately ruled in his favour calling his dismissal ‘illegal'

At the time, Tata Sons issued a statement saying that the decision would not hold. "It is not clear how the NCLAT order seeks to over-rule the decisions taken by shareholders of Tata Sons and listed Tata operating companies at validly constituted shareholder meetings," the company's spokesperson told Business Insider.

Last week, TCS, Tata Teleservices and Tata Trusts all filed a petition with the Supreme Court asking for a stay on the Mistry's reinstatement. As per the NCLAT order, Mistry is supposed to return as chairman of Tata Sons at the end of this month.

Even Ratan Tata, Tata Sons' chairman emeritus, approached the Supreme Court asking it to quash the NCLAT's order stating that he acted against the interest of shareholders.

"I am humbled by the NCLAT order, which after review of the enormous material on record, recognized the illegal manner in which I was removed and the oppressive and prejudicial conduct of Mr.Tata and other Trustees," Mistry told reporters on Sunday.

He clarified that he isn't looking to reinstate himself as the executive chairman of any of the Tata companies. He is, however, demanding a seat on the board.

"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," Mistry explained.

See also:
The volatile fortunes of low-profile Cyrus Mistry who was made the Chairman of Tata Sons only to be ousted soon after — now he's fighting his way back

Tata Sons says the court gave Cyrus Mistry more than he wanted

First Cut: The legal implications of Mistry's victory in the case against Tata Sons