The Tata group spurned the Mistry family’s offer to swap its stake in Tata Sons Ltd for shares in the group’s listed companies, terming the separation plan as nonsense. “It’s nonsense. I’m opposing it,” Tata Sons’ lawyer Harish Salve said during a hearing before the Supreme Court on Thursday. Senior counsel Salve argued that the court cannot grant this kind of relief as the Mistry family’s settlement plan is based on charges of minority shareholder oppression against the Tata group. The rejection of the offer to swap stakes sets the stage for a long legal battle between India’s largest conglomerate and the single-largest shareholder in the group holding company.
The cash-strapped Shapoorji Pallonji (SP) Group offered to swap its 18.4 per cent stake in Tata Sons for shares in publicly traded companies of the Tata group, including Tata Consultancy Services Ltd, and cash. The SP Group estimated its stake to be worth Rs 1.75 trillion, but the Tata group said it is worth less than half of that at Rs 80,000 crore. The Mistry family said that it was compelled to seek separation under duress as continuing litigation in the matter would have a serious adverse impact on the SP group’s finances and those whose livelihoods were tied to it.
In September, the Mistry family decided to end its 70-year-old ties with the Tata group after a bitter legal battle that started with the ouster of Cyrus Mistry as Tata group chairman.