Cyrus Mistry suffered a setback in his challenge against Tata Sons Ltd. after the National Company Law Tribunal (NCLT) rejected his argument that he had the requisite shareholding to bring charges of oppression and mismanagement.
The tribunal, however, did not dismiss the petition and posted the matter for Tuesday, to decide whether to grant a waiver on the condition that a shareholder must hold at least 10 percent in the company to file an oppression and mismanagement petition.
Under the Companies Act, 2013, NCLT has the discretion to waive the condition.
A detailed order is yet to be released by NCLT.
The two firms – Cyrus Investments Private Ltd. and Sterling Investment Corporation Ltd. – together hold 18.4 percent equity stake in Tata Sons and is managed by the Mistry's family.
The Mistry firms had moved the tribunal after he was removed as chairman by the board of Tata Sons Ltd. on October 24, 2016.
Mistry's counsel had argued that the two entities together meet the eligibility criteria to challenge the decision taken by the Tata Sons' board. Tata Sons had contended that “issued share capital” includes both equity and preference capital shares, which together brings down the Mistry family's holding in Tata Sons to less than 3 percent of the issued share capital rendering them ineligible to file the case.
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