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Tata sons said to overcome mistry in vote on going private
[MUMBAI] Shareholders of Tata Sons Ltd voted Thursday to convert the holding company to a private entity, a move that was opposed by ousted Chairman Cyrus Mistry, according to a person familiar with the matter.
The motion introduced by the board led by Tata Trusts, which controls 66 per cent of the company, dealt a blow to Mr Mistry's efforts to preserve the value of his family's stake in India's largest conglomerate. A private company will restrict the Mistry family's ability to sell its stake of about 18 per cent to shareholders outside the company.
The voting result extends an almost year-long corporate feud between the US$105 billion cars-to-software Tata Group and one of India's richest families. Mr Mistry had been hand picked by scion Ratan Tata, 79, before being ousted last October amid internal clashes over corporate governance and Mr Mistry's strategy of paring an empire built through more than a decade of acquisitions.
A spokesman for Mr Mistry declined to immediately comment, while an email sent to the Tata Sons' press office went unanswered.
The Tata Sons proposal at the annual shareholder meeting required approval from at least 75 per cent of stakeholders and will now seek the endorsement of a local company court.
Directors for listed Tata companies such as Tata Steel Ltd, Tata Motors Ltd, Indian Hotels Co and Tata Power Co, which own less than 10 per cent in the holding company, also approved the move, the person said, asking not to be identified before an announcement. Mr Mistry's family had earlier said they would vote against the plan, saying it unfairly restricted minority shareholder rights to sell their shares.
Separately, Mr Mistry got a boost for his case from a government panel's ruling Thursday. The National Company Law Appellate Tribunal's panel decided to waive a rule that stipulates investors must own at least 10 per cent of a company to file a case claiming oppression of minority shareholders. That means Mr Mistry's family, which would own less than 3 per cent of Tata Sons if preferential shares are included, can proceed with a complaint he has filed claiming the conglomerate is oppressing the rights of minority shareholders.
Tata Sons, founded in 1868, named former Tata Consultancy Services Ltd chief Natarajan Chandrasekaran, to take the holding company helm in January. The move followed a feud between Ratan Tata's allies in the company and Mr Mistry.