Shapoorji Pallonji has termed the removal of Cyrus Mistry from the Chairman post of Tata Sons as "illegal." It is likely to challenge the decision, people privy to the development told CNBC-TV18.
Shapoorji Pallonji Group has claimed that the removal of Mistry is "illegal" as a 15-day notice has to be served, said senior journalist Arun Giri. He added that Tatas took legal opinion of former Solicitor General Mohan Parasaran and former Justice RV Raveendran.
Mistry’s removal as chairman has to do with management issues, said Giri. The Shapoorji Pallonji scion has been removed as the Chairman of Tata Sons and not the Director.
Ratan Tata has been appointed as Interim Chairman till a successor is found. Legal expert and corporate lawyer RS Loona said while shareholder approval is required for removing a director, in Mistry's case, he was Chairman.
He said the board of directors have the authority to remove a chairman and what remains to be seen is whether Mistry was given a chance to explain his stance.
In April 2013, barely months into the new job, Mistry had announced his intent to walk the talk on bringing in a generational change in the Tata group’s top leadership.
The media-shy 48-year-old, whose term lasted barely three years 10 months, was the second chairman without the Tata name after Nowroji Saklatwala. Saklatwala also had a short tenure, of six years, dying in the saddle in 1938.
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