NCLT reserves order on maintainability of plea by Cyrus Mistry family firms
Cyrus Investments and Sterling Investments seek a waiver of qualification norms
Mumbai: The National Company Law Tribunal (NCLT) on Monday reserved the order on a plea by the Cyrus Mistry family firms that they are qualified to file a petition alleging mismanagement of Tata Sons Ltd and oppression of minority shareholders. Separately, the Mistry family firms—Cyrus Investments Pvt. Ltd and Sterling Investments Pvt. Ltd—also sought a waiver of qualification norms.
The tribunal will announce its order on 6 March on the maintainability of the original petition (alleging mismanagement and oppression) and waiver, while the petition itself would be heard again on 7 March.
The question of maintainability arose when Tata Sons claimed that the two firms did not have the required 10% shareholding to file such a petition, if preference shares were also included. The firms own a combined 18.4% of ordinary equity shares of the Tata group holding firm.
In a hearing on 31 January, the firms insisted that they wanted the tribunal to first hear the petition on maintainability. The tribunal did not agree and said that it would hear the plea on maintainability along with the main petition. The tribunal also gave the green signal to Tata Sons to hold a planned shareholder meeting. On 6 February, Cyrus Mistry was removed as a director of Tata Sons in this shareholders meeting, a few months after his ouster as chairman in a 24 October boardroom putsch.
The investment firms approached the National Company Law Appellate Tribunal (NCLAT) against the order. Dismissing the appeal, NCLAT said that tribunal must first hear the petition on maintainability issue, if it held against Mistry camp, the tribunal must hear them on their waiver plea and then on merits of the case.
Mistry firms have filed a waiver application to drop the petitioning requirement of a minimum 10% shareholding by minority shareholders for such appeals.
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