The National Company Law Appellate Tribunal on Friday, 24 August, declined to pass an interim order on Cyrus Mistry's plea against the conversion of Tata Sons Ltd to a private limited company.
But the two-judge bench headed by NCLAT Chairperson Justice SJ Mukhopadhyay asked Tata Sons not to take steps on the sale of minority shareholders’ stake until the appellate tribunal decided on Mistry’s plea alleging oppression by the group holding company.
The NCLAT will start hearing arguments on Mistry’s appeal against the National Company Law Tribunal order that removed him as Chairman of Tata Sons on 24 September.
Mistry was represented by Senior Advocate CA Sundaram who had argued that there was no urgent reason for this conversion and it should be stopped until Mistry’s plea against his removal is decided by the NCLAT.
Senior Advocate Abhishek Manu Singhvi, who represented Tata Sons, had informed the court that the Registrar of Companies had recognised Tata Sons as a private limited company on 6 August.
Tata Sons had received the nod from shareholders to convert itself into a private limited company from being a public limited company in September 2017, limiting in effect the Mistry family's ability to sell their stake to outsiders.
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 external investors.
(This story was originally published on BloombergQuint.)
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