Tata Sons’ move to become a private company has been opposed by its former Chairman Cyrus Mistry’s family, which termed it an act of oppression of minority shareholders .
Mistry’s family holds 18.4 per cent stake in Tata Sons through Cyrus Investments and Sterling Investments.
In a letter to Tata Sons, Cyrus Investments alleged that the proposal to convert Tata Sons from a public to a private company is “
The letter, seen by
The contents of the AGM notice and explanatory statement — suggesting that the conversion of Tata Sons from a public limited company to a private limited company was merely a formality — are misleading, the letter added.
Tata Sons was incorporated under the Companies Act, 1913, when its Articles of Association (AoA) had the features of a private limited company. With effect from May 1, 1975, Tata Sons became a “deemed public company” under the provisions of the Companies Act, 1956. However, its AoA remained unchanged, that is, it continued to contain features of a private limited company, the letter added. Thereafter, the Companies Act was amended in 2000 under which Tata Sons was required to inform the Registrar of Companies (RoC) if it had become a private company.
According to the Mistry camp, Tata Sons failed to make any such application to the RoC for reconversion into a private limited company. Therefore, Tata Sons became a public company, the letter added.
The letter also urged withdrawal of the proposal, and added that it will oppose the proposed resolutions when they are put to vote.
When contacted, a Tata Sons spokesperson said: “The reinstatement of Tata Sons as a private company was considered by the board to be in the best interest of the company.”