‘Tata Sons is a board-managed firm, not a family-owned one’

Mumbai | Updated on December 15, 2020

Mistry’s counsel argues against Tata Sons’ conversion into a private company

Tata Sons, the holding company of all Tata Group firms, has to get approval from the National Company Law Tribunal (NCLT) for conversion into a private company, according to the counsel of ousted Tata Sons Chairman Cyrus Mistry.

Continuing with his argument in the Tata Sons-Mistry case on Tuesday, senior counsel C Aryama Sundaram said before the Supreme Court that as per the Companies Act of 2013, if a public company wants to become a private company, it must apply to the NCLT.

Sundaram was arguing on behalf of Shapoorji Pallonji Group firms Cyrus Investments and Sterling Investment Corporation, through which Mistry had filed his appeals.

Citing certain counter affidavits filed by the Tata Group, he said Tata Sons is not a family-owned company, but a board-managed one, and should not be viewed as a company managed by Tata Trusts.

NCLAT order

Referring to an earlier National Company Law Appellate Tribunal (NCLAT) order, the Mistry counsel also said that the appellate tribunal granted a relief that was not sought.

He was referring to NCLAT’s December 19, 2019 order, which directed Tata Group to reinstate Mistry as executive chairman, a post from which he was ousted following a boardroom coup in 2016.

Following the order, both Tata Group and the Mistry firms moved the apex court, with Tata Sons seeking annulment of the ruling and Mistry saying it was not the relief sought.

The appellate tribunal had also declared ‘illegal’, the appointment of former TCS head N Chandrasekaran as Tata Group’s Executive Chairman, and the conversion of Tata Sons from a public to a private company.

In September 2017, Tata Sons’ shareholders had approved its conversion to a private company — a move aimed to make it more agile and swift-footed.

Published on December 15, 2020

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