‘Mistry cos wanted to sell 7% stake in Tata in 2002’

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Mumbai | Published: January 23, 2018 6:01:03 AM

Tata Trusts' senior counsel Sudipta Sarkar representing certain trustees argued on Monday at the Mumbai-bench of NCLT that the Shapoorji Pallonji Group (SP Group) in the year 2002 was desirous of selling up to 7% of their shareholding in Tata Sons following the appropriate transfer procedure as prescribed in the Articles of Association (AoA) of the company.

Mistry, Tata Trusts, tata sons, NCLT, Shapoorji Pallonji Group, Mumbai, Articles of Association, Sudipta SarkarOn the point of conversion of Tata Sons from public to private limited company, Sarkar argued that there is no change in the position which is adverse to the SP Group. (Reuters)

Tata Trusts’ senior counsel Sudipta Sarkar representing certain trustees argued on Monday at the Mumbai-bench of NCLT that the Shapoorji Pallonji Group (SP Group) in the year 2002 was desirous of selling up to 7% of their shareholding in Tata Sons following the appropriate transfer procedure as prescribed in the Articles of Association (AoA) of the company. Arguing that it is the same process which the SP Group is now seeking to challenge in “hindsight”, Sarkar claimed that the SP Group “suppressed this fact of 2002”. Sarkar put the option before NCLT “to keep the interest of Tata Sons in mind and public interest by highlighting the public charitable role of Tata Trusts which include total disbursement of over Rs 15,000 crore of public charity, and accordingly consider an exit option to a disgruntled shareholder, especially when no case of oppression has been made out”. He argued that as it is always open for the minority shareholder to sell their shareholding for a value, the “circumstances are not just and equitable” and further argued that “there is no question of the NCLT entertaining a case of mismanagement and oppression”.

Sarkar reiterated that the SP Group was “merely an investor without any special rights and they came into Tata Sons as investors without any representation, or proportionate representation and fully knowing the articles were private in nature”. On the point of conversion of Tata Sons from public to private limited company, Sarkar argued that there is no change in the position which is adverse to the SP Group. “The proposed conversion to a private company is merely reverting to what the company was when the SP Group entered,” he said.

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