The Mumbai bench of the National Company Law Tribunal (NCLT) on Friday began hearing the case of Cyrus Mistry's companies – Cyrus Investments Pvt Ltd and Sterling Investments Co – against Tata Sons in relation to mismanagement and oppression of minority shareholders.
The Mumbai bench of the National Company Law Tribunal (NCLT) on Friday began hearing the case of Cyrus Mistry’s companies – Cyrus Investments Pvt Ltd and Sterling Investments Co – against Tata Sons in relation to mismanagement and oppression of minority shareholders. The final round of hearing on the matter will be between November 20 and 23. This was following the directions of the National Company Law Appellate Tribunal (NCLAT) to the Mumbai bench of the NCLT on September 21 to allow the Mistry family firms to present their case and decide on it on merits within three months. In a big reprieve to Mistry, the appellate tribunal had granted the family firms of Shapoorji Pallonji Mistry a waiver from a shareholding clause which prohibited them from filing cases against Tata Sons for mismanagement and oppression of minority shareholders. In addition, the bench on Friday also admitted an application from the Mistry firms seeking amendment to the company’s petition to bring on record facts which transpired subsequent to the filing of the company petition. These relate to the 99th annual general meeting of Tata Sons held on September 21, where Tata Sons, the holding firm for Tata group companies, got the shareholders’ approval to convert itself into a private limited company from a public limited one, thus in effect limiting Cyrus Mistry family’s ability to sell their stake to outsiders.
The move, however, needs to get the approval of the NCLT. The Mistry family, which owns an 18.4% stake in Tata Sons, had opposed the move at the AGM, terming it as “oppression of the minority interests”. Tata Trusts holds around 66% in Tata Sons.
Reiterating its stand in the application filed on Friday, Mistry firms in a statement said, “It is the case of the companies that the facts which are now sought to be brought on record are oppressive in nature and are relevant to the ongoing proceedings”.
The companies have also filed an interlocutory application seeking injunction against the resolutions passed in the said annual general meeting of Tata Sons Ltd and have sought orders for setting aside the resolution passed there.
Through the application, the companies have also sought to strike off the Article 75 (Company’s Power of Transfer) of the Articles of Association of Tata Sons, which they claim has now become oppressive in light of the resolutions passed in the annual general meeting setting in motion the conversion of Tata Sons Ltd from a public limited company to a private limited company.
After hearing the senior counsels –
C Aryama Sundaram for Mistry companies, Janak Dwarkadas for Cyrus Mistry and Abhishek Manu Singhvi for Tata Sons,
the NCLT passed a consent order and has fixed the matter for hearing from November 20, 2017.