The legal tussle between Tata Sons and Shapoorji Pallonji (SP) Group seems to have taken another ugly turn as the latter has approached Supreme Court (SC) and claimed Rs 1.75 lakh crore from Tata Sons for its 18.37 per cent stake in it.
SP Group, controlled by Pallonji Mistry and his family, has filed a fresh petition in Supreme Court as part of its plan to separate from the Tata Group.
In its petition, the SP Group said, “Tata Sons is effectively a two-group company, with the Tata Group comprising Tata Trusts, Tata family members and Tata companies holding about 81.6 per cent of the equity share capital, and the Mistry family owning the balance 18.37 per cent.”
The SP Group also said that the value of Tata Sons, which is the holding company of Tata Group, arises from its stake in listed equities, non-listed equities, the brand, cash balances and immovable assets.
“The value of 18.37 per cent stake of the SP Group in Tata Sons is more than Rs 1,75,000 crore,” they added.
The SP Group also highlighted that the disputes overvaluation can be eliminated by doing a pro-rata split of listed assets and pro-rate share of the brand. It also said that a third-party valuation can be done of the unlisted assets adjusted for net debt.
It also told in its petition to SC that it can be given pro-rate shares in listed entities of Tata Group where Tata Sons currently own stake as a non-cash settlement.
For instance, 72 per cent of Tata Consultancy Service (TCS) is owned by Tata Sons. Therefore, SP Group’s ownership in Tata Sons translates to a little over 13 per cent shareholding in TCS, valued at Rs 1.35 lakh crore at present market capitalisation.
SP Group said that this process will help Tata Sons continue to have control over the underlying asset in TCS with over 51 per cent stake.
The Mistry family also claimed that the pro-rata separation of assets and liabilities would be “fair and equitable” solution to all stakeholders.
Tata Sons unhappy
Tata Sons, however, is not happy with the separation demands sought by SP Group. Quoting top officials of Tata Sons, an Economic Times new report said the salt-to-software conglomerate is not at all inclined to make any concessions, including buying out SP Group’s stake.
The Tata Group is likely to argue in court that the possible exit of SP Group from Tata Sons was not before the court, as per the report.
It is worth mentioning that Tata Sons also disagrees with the Rs 1.75 lakh crore valuation put forward by SP Group. Tata Sons estimates the value of SP Group’s 18.37 per cent holding at approximately Rs 60,000 crore.
“The SP Group can ask for whatever number they dream of but if they expect the court to even consider such unrealistic valuations, they need to do their homework again. The Tata Group does not even take such valuations seriously,” an official close to the development told The Economic Times.
The official went on to say that the SP Group is “desperate for funds and, therefore, chalking out a separation plan”.
Meanwhile, the Tata Group also disagreed with SP Group’s claim that Tata Sons is a “two-group company”. The fresh developments indicate that feud between Tata Sons and Mistry family is far from over.
