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 NClAT had Thursday waived the minimum shareholding rule to the ousted Tata Sons chairman, Mistry 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,” 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 Tata is the Chairman Emeritus of Tata Sons, the holding firm of the $105 billion salt-to-software group, NS 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. “It will remain only in the hands of major shareholders, namely Ratan Naval Tata or Narotam S Sekhsaria, who only have right and their prerogative to file such application,” said NClAT.