MUMBAI: Tata Sons, the holding company of the $105-billion diversified salt-to-software conglomerate, on Thursday got shareholders’ nod to be a private limited firm.
Provided it gets an approval from the NCLT, all decks will be cleared to rechristen the Mumbai-based entity to Tata Sons Private Ltd from the current Tata Sons Ltd. This is the Tata Sons’ first ever AGM with N Chandrasekaran as its Executive Chairman and will go down in history for undertaking the significant move.
Essentially, it limits Tata Sons’ ousted chairman Cyrus P Mistry and his family firms’ ability to sell stake to outsiders. According to sources, Mistry may move the NCLT as a last-ditch attempt in stalling the proposal. His earlier efforts urging shareholders of Tata Group firms yielded no result.
The Mistry family, which owns 18.4 per cent stake in Tata Sons, called the move “oppression of the minority interests” and said it would vote against the proposal.
Tata Trusts holds 66 per cent in Tata Sons. By going private, Tata Sons would restrict “free transferability” of shares and is yet another attempt the majority shareholders to oppress minority shareholders,” Mistry said in a letter to shareholders.
The AGM held at the iconic Bombay House, was attended by Chandrasekaran, Ratan Tata, representing Tata Trusts and representatives of few Tata group firms, while the lone opposing sharholder Mistry and family firms were represented by a proxy.
“All resolutions placed before the AGM of shareholders were passed with requisite majority according to Tata group sources. Tata Sons’ board sought shareholders’ approval to amend its Article of Associations and the Memorandum of Association, which according to officials, was “in the best interest of the company”. It is also because the status of deemed public company was not statutorily recognised under the Companies Act, 2013.
The change in company status comes almost a year after Mistry was ousted in a boardroom coup orchestrated by Group patriarch Ratan Tata. N Chandrasekaran was appointed Chairman in January.
“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,” Mistry’s letter alleged, adding, “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.”
Mixed developments
It was a day of mixed develop-ments for beleaguered Cyrus P Mistry and family firms. While attempts to prevent Tata Sons from ceasing to be a public limited entity failed, there was relief from another quarter.
On Thursday, the National Company Law Appellate Tribunal (NCLAT) allowed Mistry firms’ plea seeking the waiver in filing case of oppression and misman-agement against Tata Sons. It, however, dismissed Mistry’s other petition on maintainability. Mistry moved the NCLAT over maintainability of petitions filed against the Tata Group and waiver required for it under the Companies Act, 2013.