New Delhi: Cyrus Investments Pvt. Ltd on Wednesday sought representation on the board of Tata Sons Ltd along with modification of some provisions of the Articles of Association.
In its submission before the National Company Law Appellate Tribunal (NCLAT) on Wednesday, counsel for Cyrus Investments said Article 121 of the Articles of Association has been used as a tool of oppression whereby, irrespective of the strength of the board and provisions as to the presence of independent directors on the board, just two trustee nominee directors alone can decide what gets approved.
“..Such Articles became Articles of oppression only recently since they had not been previously misused and in fact had been viewed as nothing more than to ensure that the nominees of the majority shareholders applying their own independent judgment, would be required to affirm significant/important decisions," it said.
The Mistry family, which had deep ties with the Tata Group before the fallout, owns an 18.4% stake in Tata Sons Ltd that is valued at $17 billion.
Aryama Sundaram, counsel for Cyrus Investments, argued that Article 75 has been used to “marginalize and eliminate the minority shareholders from the company".
“Article 75, as it stands, (coupled with propensity for misuse) would be wholly oppressive to the interests of the minority and would, therefore, need to be deleted," Sundaram said.
Article 75 relates to “company’s power of transfer shares." On 24 August, the appellate tribunal directed Tata Sons not to take any step under Article 75 for transfer of shares of minority shareholders like the appellants Cyrus Investments and others during the pendency of the appeal while admitting the plea of Cyrus Investments seeking an interim stay on the conversion of Tata Sons into a private limited company from a deemed public company.
On Wednesday, Sundaram said: “The matter of conversion was wholly against the law and in fact, against the provisions of the Companies Act itself and contrary to the assurances made to the shareholders."
The matter will be next heard by NCLAT on 11 December.