It's my duty as director to share details with I-T dept: Mistry to Tatas

Tatas want Mistry to return all classified papers; sign undertaking to not disclose such information

Ousted Tata Sons chairman Cyrus Mistry has responded to the Tatas' demand that he hand over all confidential documents in his possession by saying that obstructing him from sharing information with income tax (I-T) authorities would be against the law, reported the Economic Times on Friday. 

The financial daily added that Mistry’s law firm, Maneksha & Sethna, has said that as a director in Tata Sons, Mistry does not need permission from the board to provide information to I-T authorities. 

As reported by Business Standard, in November last year, the I-T department had summoned top officials of the Tata Trusts to explain the misuse of tax exemption granted to the trusts for charitable purposes. Confirming the development, a senior I-T official had said the Tata Trusts had been asked to submit certain documents. The action by the I-T department was a follow up to the Comptroller and Auditor General’s report of 2013 that said the Trusts were earning a huge profit, instead of using it for charitable purposes. The Tata Trusts own 66 per cent stake in Tata Sons, the holding company of Tata group. According to the Economic Times report, Mistry's law firm has said that Mistry was duty bound to provide information to the authorities as Tata Sons had "conveniently ignored" the I-T department's notice.  

"Our client (Mistry) denies that he has breached any legal duties as a director or has acted recklessly with any intent to cause harm or loss to the company as alleged or otherwise," the legal notice sent by Mistry's legal firm said, according to the ET report. “In fact, client has, in his fiduciary duty as director of the company, provided appropriate response to Deputy Commissioner of Income Tax,” the notice added.  

Mistry's response comes after Tata Sons, on December 29, 2016, asked the ousted chairman to return all classified papers and sign an undertaking within 48 hours that he would not disclose such information in future.

In its legal notice, Tata Sons alleged that Mistry had "wrongfully and dishonestly" taken confidential information out of the company premises without consent.

It asked him to "immediately return to the company all confidential information" in his possession and "not retain copies" of the same.

Asking him to cease from use or disclosure of confidential information, the holding company of the $103-billion salt-to-software group also asked Mistry to sign an undertaking within 48 hours that he "shall preserve the confidentiality of all the confidential information and not use or disclose" to anyone, including affiliates, relatives and family members.

Before that, it had sent a legal notice accusing Mistry of breaching confidentiality rules by 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.

It had threatened to take legal action against him, terming his action as "reckless failure" in discharging of "fiduciary, legal and contractual duties".

Further, the Tatas are drawing the battle lines for the last extraordinary general meeting (EGM), in a series that were planned till now, to oust Mistry from the group. Tata Sons board members on Wednesday approved calling an EGM to remove Cyrus Mistry as a director in the holding company. The final EGM is slated for next month.