Tata Sons on Thursday got the shareholders approval to convert it into a private company from a public limited holding that will help it become more swift in decision making. This will mean that Mistry's Shapoorji Pallonji group won't be able to sell its minority stake in Tata Sons without board approval.
In February, the shareholders at Tata Sons Ltd passed a motion against Mistry at a general meeting, which was approved by a clear majority, thereby facilitating his removal as a director of Tata Sons Ltd. In December 2016, the Mistry firms - Cyrus Investment Private Limited and Sterling Investment Private Limited - had filed a case at the National Company Law Tribunal (NCLT) to waive off the eligibility criteria to take on Tata Sons and Ratan Tata for oppression of minority shareholders and mismanagement.
Mistry has been locked in a legal battle with the Tatas since his unceremonious exit as chairman of Tata Sons - the promoter company of the Dollars 105-billion car-to-software Tata group in October a year ago. The National Company Law Appellate Tribunal's panel chose to waive a rule that stipulates investors must own at least 10 percent of a company to file a case claiming oppression of minority shareholders.
The move comes nearly a year after Mistry was ousted as chairman of the Tata Group, triggering a bitter boardroom battle. "Tata Sons will continue to defend its position at all appropriate forums".
"I think after the NCLAT order, Mistry will bring this issue in his revised petition in front of the Mumbai bench of NCLT and the court will decide", Mr. Gupta said.
The Mistry family, which holds 18.4 percent stake of Tata Sons, owns just 20,000 preference shares. Justice Mukhopadhaya asked the NCLT to dispose of the matter in three months. The tribunal had concluded its hearing on July 24 and reserved its judgement.
Earlier Tata Sons' move to become a private company was opposed by its former Chairman Cyrus Mistry's family terming it as an act of oppression of minority shareholders.
The two investment firms had moved the NCLAT over maintainability of their petitions filed against the Tata group and waiver required for it under the Companies Act, 2013.
After the dismissal of this plea, the firms approached the NCLT pleading they be given waiver from the 10% shareholding norm and their case be heard.
The remaining shares are with the Tata family, a few group companies and individuals. However, the appellate tribunal upheld the NCLT's order that the petition of the family firms was not maintainable because it lacked the minimum shareholding necessary to raise such issues. Mistry had been hand picked by scion Ratan Tata, 79, before being ousted last October amid internal clashes over corporate governance and Mistry's strategy of paring an empire built through more than a decade of acquisitions.
"These are proceedings to protect and reinforce the values for which the Founders of the Tata Group have given us the legacy that we should strive never to lose", the statement added.