Mistry was ousted as the chairman of Tata Sons last year.
Mumbai: Tata Sons, the holding company of $103 billion Tata Group on Thursday received the approval of majority of its shareholders to convert it into a private limited company from public limited company, a move that would bring restriction on the free transferability of shares.
Tata Sons went ahead with the proposal to change its legal status despite stiff opposition from Cyrus Mistry’s family firms, who are the biggest minority shareholder in the company.
Mr Mistry was ousted as the chairman of Tata Sons last year, which triggered a bitter public spat between the two on allegations of violation of corporate governance norms and mismanagement of the affairs of the companies.
The Tata Trusts, headed by its chairman emeritus Ratan Tata, holds 66 per cent stake in Tata Sons, while Mr Mistry’s family firms holds around 18.4 per cent. Experts said that the change of legal status of the company to ‘Private Ltd’ had thwarted the possibility of any future stake sale by Mr Mistry’s family firms to an outsider as such transfer would require the approval of the board.
“Remaining public could mean that other shareholders can transfer their shares to a rival,” said Mahesh Singhi, founder & MD of Singhi Advisors.