In yet another win for Tata Sons, the shareholders today approved the plans to convert the company into a private limited company. While the shareholders’ approval is positive development for Tata Sons, it is being considered a setback for the Mistry family who has been opposing the plans to convert the company into a private company. Ousted Tata Sons chairman Cyrus Mistry had earlier said that the move to convert the company into a private company will hurt public shareholders. The Mistry family has been campaigning vigorously to garner pubic support to scuttle the move to convert into private company. However, shareholders have given their decision today and approved in favor of Tata Sons.
Tata Sons is the umbrella organization that controls all other Tata companies. 66 percent of Tata Sons is owned by Tata Trusts that include Sir Dorabji Tata Trust and Sir Ratan Tata Trust. Around 18.4 percent is owned by two Shapoorji Pallonji family firms, Cyrus Investments and Sterling Investment. The rest is owned by Tata family, a few group companies and individuals. The Mistrys were not the original shareholders in Tata Sons. They got the shares by chance in 1930s when JRD Tata’s younger brother, Dorab, got angry and sold his shares to construction tycoon Pallonji Mistry.
By turning into a private limited company, it is expected that Tata Sons will become more agile and accurate in its decision making.