The National Company Law Tribunal on Monday said the petitions filed by two companies owned by the family of Cyrus Mistry alleging mismanagement at Tata Sons are not maintainable and posted for Tuesday (7 March) the hearing on whether this could be waived off, according to media reports.
A report in ETNow said that the NCLT has ruled that Cyrus Mistry Investment and Sterling Investment Corporation are eligible to allege mismanagement and shareholder oppression at Tata Sons.
"The petitioners have failed to convince the court that the application is maintainable," a report in the Mint quoted BSV Kumar, presiding member of NCLT, as saying. The report also said the rejection of maintainability was on expected lines.
On 20 February, the NCLT had reserved its order on maintainability of the petitions filed by the two companies. The companies have also sought waiver of certain requirements as to eligibility for filing a petition. The tribunal is expected to hear this petition on Tuesday.
During the hearing, Tata Sons opposed the petitions, saying as per a Supreme Court order on the Companies Act, the petitioners were not eligible to file such petitions before the NCLT as the minority shareholders.
The Mistry firms pleaded that under the Act, NCLT can waive the requirement that a petitioner should hold at least one-tenth of the issued share capital of the company, or represent at least one-tenth of the minority shareholders.
Tata Sons argued that if preference capital is also considered, the two petitioner firms hold only 2.17 percent of the total issued share capital of Tata Sons.
The Companies Act also says these conditions can be waived, but the Tata Sons lawyers said as the petitioners did not seek waiver at the time of filing the petitions, they can not seek such a leave later.
In December 2016, the two Mistry firms challenged before NCLT Cyrus Mistry's unceremonious removal by Tata Sons as a director of its board.
The petitions alleged mismanagement at Tata Sons and oppression of minority shareholders.
With PTI inputs
Published Date: Mar 06, 2017 12:45 pm | Updated Date: Mar 06, 2017 12:53 pm