Tuesday, February 4, 2020

Is it ethical for Ratan Tata to keep the company values up and bring down Cyrus Mistri.

The Tata Sons Limited is controlled by two Group: 

Tata Group-1: Tata Trust, Tata Family and Tata Group Cos collectively hold 81% of equity share capital of the Company , - Respondents Shapoorji Pallanji 

Group- 2: Shapoorji Pallonji Group holds 0.026%, Sterling Investment Corp holds 9.18% and Cyrus Investments holds 9.18%, collectively Shapoorji Pallanji Group hold 18% of the equity share capital of the Company - Petitioners / Appellants • Further, petition to be maintainable under section 241 of the Act ; the appellants need to fulfil the criteria of holding minimum 10% of the issue share capital of the Company as per section 244 of the Act. Here issue share capital means the equity + preference shares. • However, After considering the preference shareholding of the Company, the Petitioners holding drops below the minimum threshold prescribed under Section 244 of the Act for maintaining an oppression and mis-management claim. • The relationship between the 2 groups though not formally reflected in the Articles of Association but is based on the mutual trust and confidence which has given rise to a legitimate expectation of being treated in a mutually just, honest and fair manner and hence Tata Sons Limited can be called as a quasi-partnership-company, a concept well recognized in company law jurisprudence.
The issue in this case lies whether Ratan Tata would be firm on his values and on the other hand Mistry has a hold that he is a minority share holder and has dealt with a lot when it comes to resisting so much of fuss. But its also a stake on Ratan Tata is a man full of values and keeps a stake ,because he is a great leader with versatile qualities. We can say its ethical because values are utmost for every company.

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