Tata Sons gets this big boost to limit Cyrus Mistry ability to take strong action

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Mumbai | Published: September 22, 2017 6:12:36 AM

The Mistry family, which owns 18.4% stake in Tata Sons, had opposed the move, termed it as “oppression of the minority interests” and stated that it would vote against the proposal. Tata Trusts holds around 66% in Tata Sons.

Tata Sons, the holding firm for the Tata Group, on Thursday got shareholders’ nod to convert itself into a private limited company from a public limited one, thus in effect limiting Cyrus Mistry and his family’s ability to sell their stake to outsiders. (Reuters)

Tata Sons, the holding firm for the Tata Group, on Thursday got shareholders’ nod to convert itself into a private limited company from a public limited one, thus in effect limiting Cyrus Mistry and his family’s ability to sell their stake to outsiders. All resolutions placed before the annual general meeting (AGM) of shareholders were passed with requisite majority, Tata Sons sources said. The move now needs to get the approval of the National Company Law Tribunal (NCLT).

The Mistry family, which owns 18.4% stake in Tata Sons, had opposed the move, termed it as “oppression of the minority interests” and stated that it would vote against the proposal. Tata Trusts holds around 66% in Tata Sons. While the voting pattern was not immediately known, at least 75% of shareholders’ nod was required for the proposal to go through. A public limited company allows shareholders to legally sell their stake to anyone. But a shareholder of a private limited firm cannot sell the shares to outside investors. In a notice to its shareholders, the Tata Sons board had sought approval through special resolutions to amend its article of associations to bring about the change. It had also sought to amend the memorandum of association to change its name to Tata Sons Private Ltd from Tata Sons Ltd.

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