THE Ministry of Corporate Affairs on Friday told the company law appellate court that it did not commit any illegality in granting permission to convert Tata Sons -- the holding company of the USD 110 billion salt-to-software conglomerate -- into a private company.
The submission was made before the National Company Law Appellate Tribunal (NCLAT) during the course of hearing on a petition filed by Registrar of Companies (RoC) that seeks modifications in the tribunal’s December 18, 2019 judgement reinstating Cyrus Mistry as the executive chairman of Tata Sons.
A two-member bench of the NCLAT headed by Chairman Justice S J Mukhopadhaya, which reserved its order on the RoC’s petition, said it will clarify that the December 18 judgement does not cast aspersions on the RoC and indicated that its order is likely to come on Monday next week. Last month, the NCLAT set aside the RoC decision allowing conversion of Tata Sons into a private company.
During the proceedings on Friday, the Ministry of Corporate Affairs (MCA) said it was only discharging its duty and has not committed any illegality in the conversion of Tata Sons from a public company to a private company.
Director Prosecution, representing the MCA, informed the appellate tribunal that after amendment in 2015, there is no such requirement of any minimum prescribed share capital for conversion of companies from public to private ones.
“Nothing has been prescribed. There is no requirement. This has been done for ease of doing business,” said the MCA official.
The MCA also said that RoC Mumbai was “duty-bound” to change the status, over such a request and there was no hurry from its part in the conversion of Tata Sons from a public to a private company.
However, on this, the bench said, “Hurry was not from your part. It was from their own part (Tata).
“Your help was in that... Hurriedly changed with the board of directors” said the NCLAT.
Further, the appellate tribunal said the RoC cannot challenge its finding observations in the judgement before it.
“You are challenging the finding observation (of December 18 judgement). You go and challenge it before the Supreme Court. Your action challenging is prejudicial,” said the NCLAT.
The appellate tribunal also clearly told the MCA that it was not making any aspersions against the RoC.
“We are not making any aspersions against you. These are our findings. We are not saying anything malafide against you. Your apprehensions are unfounded,” said the NCLAT, “You can’t ask for a change for just seeking a change”.