- Under the companies Act of 2013, a private company treated as a deemed public company can restore its status as a private company. However, the conversion needs an approval from the NCLT.
- The resolution for such have been passed by majority, however requires 75% in AGM and the voting pattern was not immediately known.
- Public limited co allows shareholders to sell their shares legally to anyone but private companies shareholders can not sell to outside investors.
- Further in the act , shareholders of the company has right to apply for prevention of any oppression by
not less than ;
- 100 members or
- 1/10th of total number of member (which ever is less)or
- any member/members holding 1/10 of issued share capital .
In Tata sons , Tata trust holds 66% and Cyrus mistry family firm holds 18.4% which constitutes minority, CA Sundaram who represented mistry family before NCLT for oppression , has put some grounds that ;
- Majority of board is having directors nominated by Tata trusts and exercising its powers mala fide at the behest of majority shareholders.
- Our application is pending. In the meantime, the Tata Sons were to move NCLT and be granted permission to convert.
- Trustees were controlling Tata Sons.
- Mistry, who till June 2015 was only praised, suddenly went from “hero to villain”because he wanted to improve corporate governance and probe certain transactions.
- Mistry was “seeking to recover legitimate dues owed by C Sivasankaran (Siva) group to Tata Group towards his equity share of Tata Teleservices which had been brought back by NTT Tata DoCoMo and then were forced back on Tata Group at a value above their prevailing rate”.
- Siva group was supposed to get back over Rs 600 crore, which it didn’t and after NTT DoCoMo acquired 26 % shares in TTSL, Siva made a profit of Rs 209 crore by selling 20 million shares at Rs 117 per share in 2008. He had bought the shares at Rs 17 per share in 2005.
- here was no requirement to remove Mistry as director, but he was because he took the legal recourse against Tata Sons ,he wouldn’t have been removed as director if he had kept quiet and not protested against oppression.
- On the other hand, Tata Sons had said in a letter, “There is no prejudice to company members if it turns private.”
- The National Company Law Tribunal (NCLT) on Thursday suggested that Tata Sons can file, but not press, a plea for conversion from being a public company to private, while a hearing was on, till January 16. (Means can’t force)
Means oppressions hearing is adjourned also.
