The Corporate Affairs Ministry has finalised a takeover code for unlisted companies under which a majority shareholder with three-fourth of the equity in a company can move the National Company Law Tribunal to take over rest of the stake.

The policy could have an impact on the ongoing battle between Tata Sons and former Chairman Cyrus Mistry. Mistry’s family — the Shapoorji Pallonji Group — is a minority shareholder and Tata Trusts, the majority shareholder of Tata Sons, could move the tribunal to acquire the shares held by the Mistry camp.

Under the new rules, an application for takeover should contain the report of a registered valuer disclosing the details of the valuation of the shares proposed to be acquired.

The value must take into account the highest price paid by any person or group of persons for acquisition of shares during last 12 months, the fair price of shares of the company to be determined by the registered valuer after taking into account valuation parameters, including return on net worth, book value of shares, earning per share, price earning multiple vis-a-vis the industry average, and such other parameters as are customary for valuation of shares of such companies.

The takeover offer should also have details of a bank account, to be opened separately, by the majority shareholder wherein 50 per cent of the total consideration of the takeover offer has to be deposited.

However, market experts said that it may not be easy for the Tata group to buy out Mistry’s stake. “Even if the Tatas move the tribunal to takeover the shares held by Shapoorji Pallonji Group, it can be challenged by the latter. If that happens then the case will go all the way up to the Supreme Court and a final order may not come quickly. Secondly, the Tatas will have to keep 50 per cent of the value of the shares in a deposit as long as the case is being heard at various courts,” said an industry expert on corporate law. According to an estimate made by an industry expert, the value of shares held by the Shapoorji Pallonji Group in Tata Sons could be over ₹1.5 lakh crore.

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