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Tata Sons' shareholders vote for going private

As a Pvt Ltd firm, the group holding company would not need to make as many disclosures as it made until now

Dev Chatterjee  |  Mumbai 

N Chandrasekaran, chairman, Tata Sons
N Chandrasekaran, chairman, Tata Sons

Tata Sons’ shareholders have voted in favour of going private, overruling objections raised by the “All resolutions placed before the annual general meeting were passed with a requisite majority,” a source said. 

Sources familiar with the developments said the Mistry family, which owes an 18.5 per cent equity stake in the company, opposed all the resolutions at the AGM, except the one relating to the dividends. 

The family has also decided to challenge the move in the courts. 


The new structure, approved by the shareholders during the group’s AGM at on Thursday, would mean significant changes. For one, as a private limited firm, the holding company, headed by N Chandrasekaran, would not need to make as many disclosures as it has made until now. Secondly, if it defaults in paying dividend for two or more years, its preference shareholders would get voting rights, with Chairman Emeritus getting a bigger say. 

As on December 2016, is the largest shareholder of preference shares (holding 35.6 per cent). He is also the biggest individual holder of equity and preference shares together (holding 31.43 per cent).


Tata Trusts and companies hold nearly 79 per cent equity stake in Tata Sons, with individual investors, including the Tata family, holding the rest of the equity.

did not comment on the AGM proceedings. The also declined to comment.

Cyrus Investments, in an earlier letter to Tata Sons’ board of directors, had said the proposal to convert from a public company to a private one, constituted yet another act of oppression of minority shareholders of at the hands of the majority shareholders. “The real motive behind convening the proposed AGM is mala fide and for an ulterior purpose and the proposed resolutions are not in the interests of Tata Sons,” the letter said. The plans to raise these issues at the next National Company Law Tribunal hearing.

REVAMP ROUTE
  • As a Pvt Ltd firm, the group holding company would not need to make as many disclosures as it made until now 
  • If it defaults in paying dividend for two or more years, its preference shareholders would get voting rights 
  • The opposed all resolutions at the AGM, except the dividends one
  • The family has also decided to challenge the group’s move to become a private limited firm in the courts

First Published: Fri, September 22 2017. 02:27 IST