Former Tata Sons' chairman Cyrus Mistry on Tuesday urged the National Company Law Appellate Tribunal (NCLAT) to stay the proposed conversion of Tata Sons to a private limited company from its present status as a public limited one.
Former Tata Sons’ chairman Cyrus Mistry on Tuesday urged the National Company Law Appellate Tribunal (NCLAT) to stay the proposed conversion of Tata Sons to a private limited company from its present status as a public limited one. Appearing on behalf of Cyrus Investments, senior counsel C A Sundaram said the Tatas have approached the registrar of companies and were awaiting a response.
Asking for an interim order to halt the process, Sundaram said the proposed move was essentially fraudulent in nature and not in the interest of minority shareholders. The two-member NCLAT bench, headed by Justice S J Mukhopadhaya, however, refrained from granting any interim stay and said it ‘can not pass any order without listening to the other party’. Tata Sons’ appointed lawyer, senior counsel Abhishek Manu Singhvi, failed to make it to the court.
Ousted chairman Mistry had on August 3 approached the appellate tribunal challenging the July 9 order of the NCLT’s Mumbai bench that dismissed his plea challenging his removal as the chairman of the company. The appellate tribunal on Tuesday did not admit Cyrus Investments’ plea, but posted the matter for hearing on Wednesday.
Mistry is also the managing director of the Shapporji Paloonji Group that holds over 18% stake in Tata Sons through Cyrus Investments and Sterling Investments. The proposed conversion was given the go-ahead by the National Company Law Appellate Tribunal (NCLT) and subsequently by the shareholders of the company that owns a controlling stake in Tata Group firms.
The Mistry camp contends the conversion, if allowed, will lead to an inevitable lack of transparency in the functioning of the company and impact on its corporate governance practices. Legal experts said the conversion would also make it difficult for Shapoorji Paloonji group to sell its shares.