Cyrus Investments, which is owned by the family of ousted Tata Sons Chairperson Cyrus Mistry, on Monday urged six Tata Group companies to vote against the move to make Tata Sons a private firm. In a letter to Tata Steel, Tata Motors, Tata Power, Tata Global Beverages, Indian Hotels and Tata Chemicals, the investment firm said the step was against the interest of the companies and minority shareholders, PTI reported.
The letter was sent three days ahead of the annual general meeting of Tata Sons. At Thursday’s meeting, shareholders are likely to vote to convert Tata Sons from a public to a private limited company. The change can be implemented if 75% of the conglomerate’s shareholders approve it, reported The Times of India.
Cyrus Investments has argued that as a private firm, Tata Sons is likely to restrict the free transfer of shares and make divesting their shareholding in the company a challenge. “The resolutions would have an adverse and detrimental impact on the companies holding Tata Sons shares,” the letter said, also warning minority shareholders that the “various governance standards would potentially get diluted in relation to private companies”.
The six Tata Group firms hold 8.8% in Tata Sons, together worth at least $4.3 billion (Rs 28,000 crore). The Mistry family is a minority shareholder with 18.4% stake in Tata Sons. Tata Trusts has 66% stake in the conglomerate.