Natarajan Chandrasekaran-led Tata Sons is all set to become a private limited company and will be rechristened as Tata Sons Private Limited as majority of the shareholders voted in favour of the resolution at the 99th annual general meeting (AGM) of the company held at Bombay House on Thursday, said people in know of the development.
Cyrus Mistry with two investment firms holding 18.4% stake in Tata Sons however opposed the resolution to amend Tata Sons Articles of Association (AoA) and Memorandum of Association (MoA) but the resolution was passed by requisite majority.
“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.
Mr. Ratan Tata was present at the AGM as chairman of Tata Trusts, that holds 66% stake in Tata Sons.
Mr. Mistry is expected to filed an amended petition in the Mumbai bench of the National Company Law Tribunal (NCLT) after the National Company Law Appellate Tribunal (NCLAT) grants waiver to Mistry’s case against Tata Sons on maintainability plea. Tata Sons needs approval of NCLT for making it private.
The amended petition is also likely to oppose Tata’s move to make Tata Sons private citing oppression of minority shareholders in the hands of majority shareholders, said sources.
When asked to comment, C Aryama Sundaram, counsel for Mistry’s investment firms told The Hindu , “We are happy with the NCLAT order as the order vindicates our stand on the maintainability of the plea. Now, we will have to file an amended petition incorporating new developments. We have not yet decided if the amended petition will have the Tata Sons going private.”
“Let the actual order come. The option of incorporating new developments including Tata Sons move to take the company private cannot be ruled out,” said Somasekhar Sundaresan, another advocate for Mistry.
J N Gupta, co-founder and MD at Stakeholder and Empowerment Services (SES), a proxy advisory firm finds no merits in Mistry’s claim of opression and mismanagement by Tata Sons by changing to a private limited company. “I think after NCLAT order, Mistry will bring this issue in his revised petition in front of the Mumbai bench of NCLT and the court will decide. 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. When Mistry’s bought a stake in Tata Sons, it was a pure private limited company. Tata’s move to make Tata Sons private is purely to avoid any future legal uncertainty,” Mr. Gupta told The Hindu .
Earlier, Cyrus Investments Pvt. Ltd., one of the investment firms, wrote in a letter addressed to the Tata Sons board opposed the proposal to convert Tata Sons from a public company to a private company citing it constitutes yet another act of oppression of the minority shareholders of Tata Sons at the hands of the majority shareholders.
