NEW DELHI: Tata Sons Ltd suffered a shock defeat as an Indian court ordered it to reinstate the chairman it fired in 2016, a ruling that may paralyse the US$110 billion conglomerate’s plan to revive growth by selling assets, finding new partners, and cutting costs.
Tata Sons, the holding company of the group that also owns the luxury Jaguar and Land Rover brands, has four weeks to appeal the ruling. “There will be a serious bout of concern and volatility for the group as a whole because many of the large companies are on the cusp of taking some very important decisions,” said Ajay Bodke, chief executive officer at Prabhudas Lilladher Portfolio Management Services.Other key decisions by the court:Mistry to be reinstated as director of Tata group companies immediatelyShares of Tata Motors Ltd fell the most since Oct 25 after the verdict.
Tata Sons, in a statement, said that it “strongly believes in the strength of its case and will take appropriate legal recourse.” Ratan Tata, who now runs Tata Trusts that control 66% of Tata Sons, had swelled group revenues more than 60-fold in his over two decades as chairman. The court said the move to fire Mistry was “oppressive for minority shareholders and caused losses for the company.”
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