MUMBAI: Days after two family-owned companies of former Tata Sons chairman Cyrus Mistry launched a legal attack to have the entire board of the Tata parent company superseded, he was served with a legal notice for alleged breach of confidentiality as company director.
Tata Sons sent him the notice on Tuesday claiming he had “passed on confidential and sensitive information” accessed in his capacity as a director of Tata Sons, to companies owned and controlled by his family for use in a petition arising out of his October ouster.
The two sides have filed caveats following Mistry’s ouster to ensure they get a fair hearing in the matter, but this is the first time Tatas have taken the legal route to accuse Mistry of errant conduct since their bitter parting of ways. Tata Sons has demanded that Mistry redact documents unrelated to the matter, including minutes of a board meeting, and not share further confidential information he has accessed as director.
The notice served on him through leading law firm Shardul Amarchand Mangaldas, said, “You have acted recklessly with the sole intent to cause harm and loss to our client.” The two-page letter added that Mistry’s actions have “exposed Tata Sons to potential claims from third party for confidentiality breaches”, for which it intends to hold him liable. The notice said his actions “have resulted in a criminal breach of trust”.
“Cyrus Investment Pvt Ltd and Sterling Investment Pvt Ltd are companies…owned and controlled by your family and in which you personally hold a substantial stake,” it said. These companies had filed a petition before the National Company Law Tribunal (NCLT) against Tata Sons for relief under provisions of the Companies Act for alleged oppression of minority shareholders and mismanagement.
On December 22, the tribunal gave Mistry a week to reply asking him to substantiate the allegations in the petition in which he is himself named as respondent as a director of Tata Sons. His reply has to be filed first because if he places new information or documents before the tribunal, Tata Sons would then reply to those too.
The notice said Mistry’s companies “deliberately included, as exhibits, confidential data, business strategies, financial information of Tata Sons and Tata group companies, all being confidential and sensitive”. By passing on such information, Mistry has violated his confidentiality undertakings, his fiduciary and legal duties to Tata Sons, it said. “Tata Sons believes that your actions itself are an act of mismanagement,” it said and added that his actions showed that he was no well-wisher of Tata Sons and Tata Group.