Tata Sons sought shareholders' approval to amend its memorandum of association and articles of association to convert itself from a public limited company to private limited.
It has also sought to change the name of the company from Tata Sons Limited to Tata Sons Private Limited, Business Standard (BS) reported on Friday.
Cyrus Investments — one of Shapoorji Pallonji family's holding companies — has already objected to Tata Sons' attempt to convert to a private limited company, saying it amounts to oppression of minority shareholders, BS reported.
"The proposal to convert Tata Sons from a public company to a private company constitutes yet another act of oppression of the minority shareholders of Tata Sons at the hands of the majority shareholders," said Cyrus Investments in its letter to Tata Sons' board of directors.
Two investment firms of the Shapoorji Pallonji family own 18.4 percent equity stake in the company. On the other side, 66 percent stake is owned by the Tata Trust, while the rest of the shares are mostly held by the Tata family and group companies.
The Board of Tata Sons had earlier in August, under the chairmanship of N Chandrasekaran, ordered its group to snap all ties with Cyrus and Shapoor Mistry's SP Group.
"As the promoter and principal shareholder of your company and as the custodian of the 'Tata' brand, Tata Sons does not support any businesses dealing in any form, whether directly or indirectly, through contracts or subcontracting arrangements," Tata Sons had said in a directive signed by FN Subedar, chief operating officer.
Tata sons requires 75 percent votes in favour of the resolution to change its corporate structure. The holding company's annual general meeting (AGM) is scheduled for September 21.
Other than shareholders approvals, the company also needs clearance from National Company Law Tribunal (NCLT) to change its corporate structure.
When asked why Tata Sons was being converted into a private limited company, a spokesperson told BS: "The reinstatement of Tata Sons as a private company was considered by the board to be in its best interest."
Corporate law experts have mixed opinions on this, with many of them believing that converting to a private limited concern would entail lesser compliance requirements for Tata Sons.
There is no mandatory requirement of independent directors when a company goes private. "This could be construed as detrimental to the status of minority shareholder," BS quoted a corporate law expert as saying.
