10% shareholding cap: Tata-Mistry battle put spotlight on rule

There are several instances where courts have dismissed petitions that do not meet the 10% threshold

As the high-profile legal battle at Tata Sons between the two promoter groups gathers pace, experts are divided as to whether there is need to take a fresh look at the provisions that protect the interests of minority shareholders. According to Section 244 of the Companies Act, 2013, shareholders who own at least 10 per cent of the issued share capital or represent at least one-tenth of the minority shareholders of the company could invoke action under “oppression and mismanagement of minority interest”. The National Company Law Tribunal (NCLT), however, has the powers to waive this requirement for shareholders who