Lawstreet Journal

[DAY6] Most crucial obligations on Directors is that they are fiduciary: Mr. Shyam Divan on behalf of Cyrus Mistry in Tata V Mistry Case

Lawstreet Journal 21 Dec 2020 7:55pm

Image courtesy: Lawstreet Journal Business [DAY6] Most crucial obligations on Directors is that they are fiduciary: Mr. Shyam Divan on behalf of Cyrus Mistry in Tata V Mistry Case

On the Day 6 of court battle between Tata Sons and Cyrus Mistry, Mr. Shyam Divan on behalf of Cyrus Mistry tendered his arguments on three main points : first, importance of Corporate Governance;  second, provisions of AoA and third, the history of relationship between Tata Sons and Cyrus Mistry. 

On the argument of Corporate Governance, Mr. Divan started by submitting that the present case in essence is about corporate governance.

“Law has evolved from corporate majority to corporate democracy to a higher set of values and a higher standard ensuring transparency”, Divan submitted. 

Citing Section 135 on CSR, Section 149 talking about Board of Directors and Section 151 on directors to be elected by small shareholders, Mr. Divan argued that all this is a bouquet of provisions to strengthen corporate governance. 

“This also includes duty of directors, audit committee etc”, Shyam added. 

Pointing the importance of Section 149 of Companies Act, Senior Counsel stated that law enjoins companies to be managed within a prescribed statutory framework managed by BOD and no one else.

Most crucial obligations on Directors is that they are fiduciary : Divan

This fiduciary role and responsibility is the highest level of duty that law imposed to them. “ he continued. 

He further added that a fiduciary cannot delegate his duty as to allegiance wrt company alone. 

There has been a breach of Articles, misuse of the articles and violations of essential understanding of these two groups : Divan

He further stated that lack of integrity or honesty in dealings is much broader than siphoning of money, 

He then… Continue Reading...


Tagged: Tata-Mistry  
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