CYRUS Mistry Opposing Tata Sons’ Plan to Turn The Holding Company Into Public Limited Company

September 17th, 2017 | by Pranab Kumar Chakravarty
CYRUS Mistry Opposing Tata Sons’ Plan to Turn The Holding Company Into Public Limited Company
Business
0

 

CORPORTATE houses across the world are waiting for the outcome of the September 21 Annual General Body Meeting of the 104 billion dollar Tata Group of companies proposing to convert Tata Sons Private Limited to Tata Sons Public Limited. In a notice to its annual AGM, Tata Sons has sought approval of its shareholders to amend its memorandum of association and articles of association for the purpose of converting itself from a public limited company into a private limited one, and to change its name from Tata Sons Limited to Tata Sons Private Limited.

About 66 per cent of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. The largest of these trusts are the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust which was created by the sons of Jamsetji Nusserwanji Tata. TATA Group runs 96 businesses of which 28 companies are publicly listed on the various stock exchanges. Tata Group is among the world’s top 50, according to market capitalization and reputation. Ousted Chairman Cyrus P Mistry family’s holds 18.4 per cent in Tata Sons. He is opposing the move and decided to vote against the proposals. He is approaching the National Company Law Tribunal for intervening saying it is another attempt by the majority share holders to harass the minority ones.   By the present capitalisation of Tata Group is estimated at $100 billion and high profile corporate honcho ex- Chairman Ratan Tata’s net worth comes out to be about $830 million.“The reinstatement of Tata Sons as a private company was considered by the board to be in the best interest of the company,” said a Tata Sons spokesperson on Friday.

Cyrus Investments, in its letter to Tata Sons’ Board of Directors, has said “The proposal to convert Tata Sons from a public company to a private company constitutes yet another act of oppression of the minority shareholders of Tata Sons at the hands of the majority shareholders.”

“The real motive behind convening the proposed AGM is mala fide and for an ulterior purpose and the proposed resolutions are not in the interest of Tata Sons,” says the letter. Cyrus Investments’ letter says that the AGM notice and explanatory statement, which suggest that the conversion of Tata Sons from a public limited company to a private limited one is merely a formality, are misleading. The change in Tata Sons’ corporate structure will require to be cleared by a special resolution, needing at least 75 per cent votes. Besides shareholders’ approval, the change in its status will also need an approval from the National Company Law Tribunal, according to  the Company  sources.

Share this:

Leave a Reply

Your email address will not be published. Required fields are marked *

UA-62652249-1