Cyrus Mistry opposes Tata Sons’ plan to become pvt firm

The move has, however, been objected by the Mistry family, which holds 18.4 per cent stake in Tata Sons. Tata Trusts, headed by Ratan Tata, holds 66 per cent.

By: ENS Economic Bureau | Mumbai | Published:September 16, 2017 3:28 am
cyrus mistry, tata sons, tata group, tata sons private firm, business news, tata Former Tata Sons Chairman Cyrus Mistry.

Cyrus Mistry, who was ousted as the chairman of Tata Sons in October 2016, has opposed the plan of Tata Sons, the promoter of major operating companies of the Tata group, to convert itself into a private limited firm from a public limited one.

In a notice to shareholders ahead of its annual general meeting to be held on September 21, Tata Sons board had sought approval through special resolutions to amend its article of associations to bring about the change in the structure. It has also sought to amend the memorandum of association to change its name to Tata Sons Pvt Ltd from Tata Sons Ltd. The move has, however, been objected by the Mistry family, which holds 18.4 per cent stake in Tata Sons. Tata Trusts, headed by Ratan Tata, holds 66 per cent.

In a letter to the board of directors of Tata Sons, Cyrus Investments Pvt Ltd alleged the step as another act of oppression of the minority shareholders of Tata Sons at the hands of majority shareholders. “The real motive behind convening the proposed AGM is malafide and for ulterior purposes and the proposed resolutions are not in the interest of Tata Sons as a whole or at all,” the letter alleged.

Cyrus Investments Pvt Ltd and Sterling Investments Corporation of the Mistry family are fighting a legal battle against Tata Sons at the National Company Law Tribunal (NCLT) following the dismissal of Mistry as chairman last year. “Given the nature of grievances already raised and relief sought in the NCLT petition, the timing and issuance of the AGM is a subversion of the judicial process,” it alleged.

The move to convert Tata Sons into a private limited company would put restrictions on “free transferability” of shares of the company and is “yet another attempt by the majority shareholders to oppress minority shareholders”, the letter alleged. The letter to the Tata Sons board further alleged that the proposal is a device to “subvert the highest standards of good corporate governance, which is expected to be maintained in a company of the stature and repute as Tata Sons”.

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