New Delhi: Tata Sons on Tuesday slapped a legal notice on its ousted chairman Cyrus P Mistry for alleged breach of confidentiality by making public sensitive company documents including minutes of board meetings, financial information and data.
It termed attaching dozens of confidential and sensitive company documents with the petition filed by his family investment firms before the National Company Law Tribunal against his removal, as “reckless failure” in discharging of “fiduciary, legal and contractual duties” by Mistry.
Tata Sons in the notice served through law firm, Shardul Amarchand Mangaldas, said “without there being any requirement to do so” the Mistry family firms “deliberately included in petition, as exhibits, confidential data, business strategies, financial information pertaining to the business affairs of Tata Sons Ltd, Tata Group Companies and Joint ventures (all such material being ‘Confidential & Sensitive Information’).”
“By passing on Confidential & Sensitive Information accessed by you in your capacity as a Director of Tata Sons to companies owned and controlled by your family… you have acted in complete violation of your confidentiality undertaking to Tata Sons, your fiduciary duties towards Tata Sons and your obligations under the Tata Code of Conduct,” it said.
Stating that it intends to exercise all legal rights and pursue all remedies available under law, the petition asked Mistry to “cease and desist” from sharing confidential and sensitive information.
Also, it wanted any document or parts which are unrelated to his petition before NCLT be suitably redacted. Mistry’s actions have exposed Tata Sons to potential claims from third parties for breach of confidentiality, the petition said adding Tata Sons will make him liable for all such claims.
It alleged that Mistry, who was unceremoniously ousted as Chairman of Tata Sons on October 24 and subsequently forced to resign as director from key operating companies, had not only breached his legal duties as a director but also acted recklessly with the sole intent to cause harm and loss to Tata
Terming Mistry’s actions and omissions having resulting in a criminal breach of trust, the notice said making public confidential information was done with the sole intent to cause harm and loss to Tata Sons.
The petition said his actions and omissions by itself were act of mismanagement. “Such deliberate acts and omissions on your part, clearly establishes the fact that contrary to all your claims, you are no well-wisher of Tata Sons and the Tata Group Companies. The lack of JN Tata ethos in your conduct, which you espouse often, is obvious,” it said.
Mistry last week moved the National Company Law Tribunal seeking restrain the family scion Ratan Tata, who was made interim chairman after his ouster, from attending board meetings and appoint an administrator to manage Tata Sons – the holding company of the $103 billion salt-to-software Group.
“Whilst, acting through the Petitioners (Mistry family investment firms), you (Mistry) may be agitating certain legal issues against Tata Sons and wanted to rely on certain documents, you acted in completed breach of all legal duties and obligations that you are subject to, when you caused the Petitioners to deliberately annex entire minutes of meetings of the Board of Directors of Tata Sons, without making any effort to instructing the Petitioners to redact portions of the minutes… which have no relevance or are wholly unrelated to the matters asserted in the petition,” Tata Sons said.
The petitioners — Cyrus Investment Pvt Ltd and Sterling Investment Pvt Ltd — are companies owned and controlled by Mistry family and he had substantial shareholding in them, the petition said.
“By providing Confidential & Sensitive Information to the Petitioner and further, by failing to ensure that such Confidential & Sensitive Information which was unrelated to the Petition was not suitably redacted, you have failed in charge of your legal duties as a Director of Tata Sons which are imposed on you under law, including the Companies Act, 2013,” it said.
Mistry deliberately used the Confidential and Sensitive Information entrusted with him “to cause wrongful loss” to Tata Sons and Tata Group companies, the petition alleged.
“Such reckless failure on your part in discharging your fiduciary, legal and contractual duties has caused irreparable harm and damage to Tata Sons and Tata Group,” it said.