The contentious issues of whether Tata Sons is agreeable to buy out the 18.4% stake held by the Shapoorji Pallonji Group in the holding firm as per the formula submitted by it, and if not whether the latter can pledge its shares to raise funds, will be taken up by the Supreme Court for final hearing on December 2.
On Wednesday, senior counsel CA Sundaram, appearing for SP Group’s Cyrus Mistry, tried to inform a bench led by Chief Justice SA Bobde that another application seeking an alternate relief has been filed; but the CJI showed his displeasure asking why fresh applications were being filed when the legal dispute has been already put up for final arguments. “Everything would be covered during the final hearing,” Justice Bobde said while fixing the final date for final hearing.
The SP Group through its affidavit filed on October 29 had told the Supreme Court that it wanted to exit Tata Sons and had proposed a non-cash settlement for its 18.4% stake. It had offered a pro-rata division of all the assets of the holding firm as part of the settlement and had valued its stake in Tata Sons at Rs 1.75 lakh crore.
According to the non-cash settlement formula proposed by the SP Group, it should get pro-rata shares in all the listed entities of the Tata Group where Tata Sons currently owns stake. This way, it has said that it should get a stake of 13.22% stake in TCS. Further, based on this formula, its stake in other listed firms of the group would be below 10%. It has also sought a pro-rata share of the Tata brand and asked for a neutral third-party valuation for the unlisted assets adjusted for net debt.
The SP Group’s proposal had come in response to Tata Sons’ stand in the course of a hearing on September 23 offering to buy out the group’s 18.4% stake in the holdco.
The SP Group wanted to pledge its shares in Tata Sons to raise funds but this was objected by the Tatas who apprehended the shares could end up in the wrong hands.
Since October 24, 2016, when Cyrus Mistry was unceremoniously sacked as chairman Tata Sons, the SP Group and the Tatas have fought bitterly. While the SP Group claimed they had been oppressed as minority shareholders, the Tatas have alleged that Mistry had mismanaged the affairs of the group. Mistry countered this charge stating that Tata Group had suffered because of several acquisitions.
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