We strongly believe that the allegations made by the petitioners are without basis & incorrect.
Cyrus Mistry family firms - Cyrus Investments Pvt Ltd and Sterling Investments Pvt Ltd - had moved NCLAT over maintainability of their petitions filed against the Tata group and waiver required for it under the Company Act 2013.
"The resolution to convert Tata Sons into a private limited company and it's change of name has been passed with requisite majority as majority of the shareholders voted in favour of the resolution", said the source in the know of the development. "These are proceedings to protect and reinforce the values for which the Founders of the Tata Group have given us the legacy that we should strive never to lose".
Some corporate governance experts said the proposal to become a private limited company is not oppression of minority shareholders as alleged by Mistry. The case was filed in December previous year after Mistry was removed as chairman in October in a surprise move that sparked a boardroom battle. As this was a legal prerequisite, the two firms had moved the NCLAT for a waiver, which has now been granted. The waiver sought was to the 10 per cent issued share capital threshold and other eligibility provisions under the Act.
In April, the Mumbai bench of the National Company Law Tribunal (NCLT) had rejected the waiver plea filed by the investment firms while on March 6, it had set aside the one over maintainability. I however find no merits in Mistry's opposing the move citing it to be oppression and mismanagement in the change of Tata Sons from public limited company to a private limited company. It had said that, "When language of a section is clear, there is no need to apply doctrine of purposive interpretation, to inflect.The only precedent applicable is the one that says issued share capital means equity plus preference".
The former Tata Sons chairman had even written to the boards of group companies such as Tata Motors, Tata Power, Tata Steel, Tata Chemicals, Tata Global Beverages and Indian Hotels that own shares in the holding company in a bid to persuade them to vote against the proposals. The Mistry camp has said its 18 per cent equity shares qualified it to file the petition.
The appellate tribunal has also directed the Mumbai bench of the NCLT to issue a notice to the respondents and proceed on the matter. But against an order of NCLAT, the matter can be taken in appeal to the Supreme Court, by either side yet.
A spokesman for Mistry declined to immediately comment, while an email sent to the Tata Sons' press office went unanswered.