Industry

Tata Sons verdict: Corporate Affairs Ministry seeks modification in NCLAT order

Cyrus Mistry. File

Cyrus Mistry. File   | Photo Credit: PTI

The RoC moved the Tribunal requesting to amend its order and remove the word “illegal” with respect to the conversion of Tata Sons from a public company to a private company.

The Corporate Affairs Ministry on Monday moved the National Company Law Appellate Tribunal seeking certain modifications in its order in the Tata Sons matter.

The Registrar of Companies (RoC) on Monday moved the National Company Law Appellate Tribunal (NCLAT) requesting to amend its order and remove the word “illegal” with respect to the conversion of Tata Sons from a public company to a private company.

The petition filed by the RoC was mentioned on Monday before the NCLAT, which has directed to list the matter on January 2, 2020, for hearing.

In its petition, the RoC had asked “to carry out the requisite amendment in paragraphs of the judgement dated December 18, 2019, to correctly reflect the conduct of RoC Mumbai as not being illegal and being as per the provisions of the Companies Act along with the rules.”

It has also asked NCLAT to “delete the aspersion made regarding any hurried help accorded by RoC Mumbai to Tata Sons except what was statutorily required by RoC Mumbai”.

Also read | Significant reversal: On NCLAT decision on Mistry

The RoC also said it has acted in a “bona fide manner” in converting the status of Tata Sons as “there was no stay granted by this appellate tribunal on the operation of the judgement dated July 9, 2018, of Mumbai, NCLT at the time when this intimation was filed by Tata Sons Ltd.”

The RoC has also asked to implead it as party in the matter.

Passing an order on December 18, the NCLAT had directed for the reinstatement of Cyrus Mistry as the Chairman of Tata Sons.

In that order, the appellate tribunal has also quashed the conversion of Tata Sons — the principal holding company and promoter of Tata firms — into a private company from a public firm and had termed it “illegal”.

The appellate tribunal has said the action taken by the RoC to allow the firm to become a private company was against the provisions of the Companies Act, 2013, and “prejudicial” and “oppressive” to the minority member (Mistry Camp).

“The Company [Tata Sons] shall be recorded as ‘Public Company’. The RoC will make correction in its record showing the Company as ‘Public Company’,” said NCLAT.

Months after Mr. Mistry was sacked, Tata Sons had received its shareholders’ nod in September 2017, to convert itself into a private limited company from a public limited company, thereby absolving it of the need to take shareholder consent in taking crucial decisions, which could be passed with just the board’s approval.

Tata Sons Ltd. was initially a ‘Private Company’, but after the insertion of Section 43A (1A) in the Companies Act, 1956, on the basis of average annual turnover, it assumed the character of a deemed ‘Public Company’ with effect from February 1, 1975, the order said.

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Printable version | Feb 18, 2020 8:55:49 PM | https://www.thehindu.com/business/Industry/tata-sons-verdict-corporate-affairs-ministry-seeks-modification-in-nclat-order/article30378948.ece

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