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Cyrus Investment objects to AGM agenda

LiveMint logoLiveMint 18-09-2017 Shally Seth Mohile

Mumbai: Cyrus Investment Pvt. Ltd, the minority shareholder in Tata Sons Ltd, in a 18 September letter to the directors of Tata group companies that have shareholding in Tata Sons, has alleged that the resolutions proposed to be passed at the annual general meeting (AGM) on 21 September are not in the interests of the company.

These resolutions, if passed, would impose a restriction on the free transferability of shares held by the firm in Tata Sons and the company “would face greater challenges in disinvesting its shareholdings in Tata Sons”, the letter said. Therefore, any resolutions such as the one proposed to be passed at the AGM of Tata Sons would have an adverse and detrimental impact on the same and are contrary to interest of the public shareholders of the company.

It also pointed out concerns regarding the potential dilution of governance standards if Tata Sons changes its status from a public limited company to a private limited one. The provisions of the Articles of Association, which are voluntarily included by Tata Sons despite its change in status cannot be equated with the same levels of accountability and corporate governance norms and therefore cannot protect minority shareholder’s interests. The AGM notice it alleges, fails to highlight these concerns to the shareholders.

The investment firm in its letter to the directors of public limited company with holdings in Tata Sons urged shareholders to “apply their mind” and discharge their “duties in law” as the investment involved are material in nature and size. As directors, it pointed out, these firms have additional responsibilities owed to public shareholders and investors in the company’s own securities.

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