Don’t force to sell, directs NCLAT

New Delhi, Aug. 24: The National Company Law Appellate Tribunal on Friday restrained Tata Sons from forcing ousted chairman Cyrus Mistry’s family out of the holding firm of the $ 100 billion Tata Group, but refused to stay its conversion to a private company.

The tribunal, in an interim order on Mr Mistry’s plea for putting on hold the approval for conversion of Tata Sons’ into a private company from a public limited company, admitted his petition against the move and posted the matter for hearing on September 24.

The Mistry family has also challenged the order of the Mumbai- bench of National Company Law Tribunal that upheld ouster of Cyrus as chairman of Tata Sons in a boardroom coup in 2016.

Besides change to a private company, the Mistry family, which is the largest shareholder in Tata Sons, had in NCLAT challenged the move by the company to restrict shareholders from freely selling their stake and the Article 75 of the articles of association that can be used by the board to force a shareholder to sell out.

“Taking into consideration the facts and that the appeal is pending and if the Appellants ( Mistry) are forced to sell their shares which may affect the merits of the appeal, as they will cease to be member( s) of the company ( Tata Sons).

“We direct the respondents ( Tata) not take any step in terms of Article 75 for transfer of shares of minority shareholders like appellants ( Mistry) and others during the pendency of the appeal,” the tribunal said.

Over change of status of Tata Sons, NCLAT said, “No further interim order is required to be passed at this stage.” In September last year, Tata Sons had received shareholders' nod to convert itself into a private limited company.