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'Time to separate': Shapoorji Pallonji Group ends ties with Tata

The SP Group and Tatas have been engaged in a bitter legal battle ever since Cyrus Mistry was sacked as Chairman of Tata Sons in October 2016.

Published: 22nd September 2020 09:44 PM  |   Last Updated: 23rd September 2020 06:33 AM   |  A+A-

Cyrus Mistry

Cyrus Misrty, son of tycoon Pallonji Mistry (File photo| Reuters)

By Express News Service

NEW DELHI: Hours after the Tatas offered to buy Shapoorji Pallonji group’s entire stake in Tata Sons, the Mistry family-led group said it was ready to exit the Tata group. The salt-to-Jaguar cars conglomerate told the Supreme Court on Tuesday it was open to buying out the 18.37% stake held by Shapoorji Pallonji in its holding firm Tata Sons.

The Tatas made the offer verbally during the hearing on whether the Shapoorji Pallonji group can pledge Tata Sons shares to raise funds. The Shapoorji group issued a statement saying it had “stated before the Supreme Court that a separation from the Tata Group is necessary due to the potential impact this continuing litigation could have on livelihoods and the economy.” The statement said “The Mistry family believes that a separation of interests would best serve all stakeholders.” It added the Mistry family was “in the midst of raising funds against the security of their personal assets to meet the crisis arising from the global pandemic” but the Tatas were blocking this.

The statement also alleged “several issues identified years earlier, continue to plague the group... Be it the operations of Tata Steel UK, where over the last three years alone the operational losses have increased by an additional Rs 11,000 cr.” Appearing for the Tatas, senior lawyer Harish Salve said if SP group wishes to sell the shares, Tata is willing to buy but the shares need to be protected. 

SC orders SP Group to keep status quo on Tata share pledges

Senior advocate Aryama Sundaram appearing on behalf of Cyrus Investments said the Articles of Association of Tata Sons bars a transfer of shares, but not their pledging. At this, the CJI said it has been held on various occasions that pledging is in fact a limited transfer itself. The bench, then, adjourned the case for hearing after four weeks on October 28, indicating status quo be maintained till then.

Cyrus Mistry, son of real estate and construction tycoon Pallonji Mistry, has been locked in a bitter fight with the Tata group ever since his ouster from the chairmanship of Tata Sons in 2016. Several cases were filed by the two sides against each other.

The latest legal dispute is a challenge by the Tatas to the Shapoorji Pallonji Group’s right to pledge Tata Sons shares to raise funds. According to the Tatas, the SP Group has already pledged shares held by Cyrus Investment amounting to 9.19 per cent of Tata Sons with Axis Trustee Services and with IDBI Trustee Services.

Temporary bar on share pledging
SC has restrained Shapoorji Pallonji and Cyrus Mistry from pledging or transferring their shares in Tata Sons till Oct 28. The court also directed Tata Sons and SP Group not to take any action on the shares already pledged

​ALSO READ | SC restrains Shapoorji group, Cyrus Mistry from pledging or transferring Tata Sons shares



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