Mistry not a minority: NCLAT

New Delhi, Sept. 22: Out of 51 shareholders of Tata Sons only Ratan Tata and Narotam Sekhsaria are eligible to file against oppression and mismanagement as minority shareholders, NCLAT has observed while granting waiver to Cyrus Mistry on the minimum shareholding rule calling it ‘exceptional’ and ‘compelling circumstances’.

The National Company Law Appellate Tribunal (NCLAT) had on Thursday waived the minimum shareholding rule to the ousted Tata Sons chairman to file a case of alleged oppression of minority shareholders against Tata Sons. “We find that except Ratan Naval Tata having issued shareholding of 31.43 per cent and Narotam S. Sekhsaria having 17.01 per cent shareholding capital of the company, none of the 49 members are eligible to file an application under Section 241, individually having less than 10 per cent of the shareholding,”

MISTRY FAMILY owns 18.4% equity shares in the Tata Sons. However, their holding comes to 2.82% if preferential shares are included, thereby not meeting the criteria of at 10% ownership in a company for filing of a case of alleged oppression

NCLAT said in the order, uploaded on Friday.

Section 241 of the Companies Act 2013 empowers a minority shareholder of the company to approach NCLT against oppression and mismanagement. However, Section 244 mandates that they should have at least 10 per cent ownership in a company and the tribunal has power to grant the waiver.

While Mr Tata is the chairman emeritus of Tata Sons, N.S. Sekhsaria is chairman, non-independent and non-executive director of Ambuja Cement.

The appellate tribunal further said that under the shareholding pattern of Tata Sons, as on December 21, 2016, unless other minority shareholders join together, whose total shareholding would come up to 10 per cent of the issued share capital of the company, none of them can file application alleging oppression and mismanagement.