Tata Group stocks tumble after Mistry's legal win casts a shadow on the conglomerate's hallowed reputation

• The National Company Law Appellate Tribunal (NCLAT) has said that Cyrus Mistry’s removal as the Chairman of Tata Sons is illegal.
• The stock market, which was nearing closing, saw that the share price of almost all Tata Group companies fell.
• Tata Motors fell by almost 3% closing at ₹175.

The National Company Law Appellate Tribunal (NCLAT) has said that Cyrus Mistry’s removal as the Chairman of Tata Sons is illegal and that his position should be restored.

As soon as the news broke during stock closing time, almost all the group company stocks fell.

Tata Motors fell by almost 3% closing at ₹175. In the morning the company was trading at a seven month high of ₹185.

Source: BSE

Meanwhile the stocks of other group companies like Tata Consultancy Services, Tata Steel etc weren’t affected.

Cyrus Mistry, whose family holds a majority stake in Tata Sons, was appointed as Chairman in 2012 and was ousted in 2016. Ratan Tata has asked Mistry to step down from his post as the board had lost faith in him. However, Mistry’s refusal to leave had resulted in the very public spat between Tata and Mistry.

Mistry was later replaced by the former TCS CEO, N Chandrasekharan.

While upholding Mistry's appeal, the court has also admitted that there was 'mismanagement' by the Tata Sons Board and interference by Ratan Tata, as alleged by Mistry.

This has cast a shadow on the Group's hallowed reputation and has planted suspicion in the minds of the investors who would wonder what these wrong decisions were.

See Also:
Cyrus Mistry can return as Tata Sons Chairman three years after he was thrown out by Ratan Tata