New Delhi: The Tatas told the Supreme Court on Tuesday that the valuation of 18.37 per cent shares owned by the Shapoorji Pallonji (SP) Group in Tata Sons is between Rs 70,000 crore and Rs 80,000 crore.
The SP Group had earlier submitted in the apex court a plan for separation with the Tatas and said that its 18.37 per cent stake in Tata Sons, the holding company of Tata group firms, was worth Rs 1.75 lakh crore.
Senior advocate Harish Salve, appearing for the Tatas, stated the value before a bench headed by Chief Justice S A Bobde which commenced hearing on the cross appeals filed by Tata Sons and Cyrus Investments against appellate tribunal NCLAT’s order which had restored Cyrus Mistry as the executive chairman of the over USD 100 billion salt-to-software Tata conglomerate.
Their investment has gone up…on our calculation, I think his share should be worth Rs 70,000-Rs 80,000 crore, Salve told the bench, also comprising Justices A S Bopanna and V Ramasubramanian.
Whose shares?, the bench asked.
Salve replied, The 18 per cent .
Salve said the company has been run amazingly and between 1991 and 2012, the market cap of Tata Group went up 500 times.
However, the apex court referred to the documents placed on record before it and said the 18.37 per cent share of SP Group was valued at Rs 58,000 crore in March 2016.
Salve said that SP Group continues to be around 18 per cent shareholder in Tata Sons.
He said the event which triggered the present proceedings was primarily on October 24, 2016 when Cyrus Mistry was removed as the executive chairman, months before his term was to end in March 2017.
Original appointment of Cyrus Mistry as the executive chairman was to end in March 2017. It was not a lifetime appointment, Salve said.
He said it is a matter of prestige to be appointed to the board of Tata Sons.
It is a matter of pride that Jaguar cars are manufactured by Tata Motors, he said.
To this, the CJI asked, Where are they manufactured? India or England? .
Salve said, In England .
Salve questioned the NCLAT’s order and said that the tribunal had vested the control of the company to the minority shareholder.
He said allegation of mismanagement cannot be made if some project fails to deliver the desired result.
He referred to the Tata Nano car project and said, Sometimes, the best of projects don’t work. Then there was trouble in West Bengal and the project had to be moved to Gujarat .
You can have a different point of view but you cannot say there is mismanagement, he said during the arguments which would continue on Wednesday.
The apex court had on January 10 granted relief to Tata group by staying the National Company Law Appellate Tribunal (NCLAT) order of December 18 last year by which Mistry was restored as the executive chairman of the conglomerate.
Mistry had succeeded Ratan Tata as chairman of Tata Sons in 2012 but was ousted four years later.
The top court had also observed there were “lacunae” in the orders passed by the tribunal.
On May 29, it had issued notice to TSPL and others on a cross-appeal filed by Cyrus Investments Pvt Ltd.
The top court had on September 22 restrained Shapoorji Pallonji (SP) Group and Cyrus Mistry as also his investment firm from pledging or transferring their shares of Tata Sons Pvt Ltd (TSPL).
SP Group, which owns 18.37 per cent in Tata Sons, has said TSPL moved the top court to block its plan to pledge shares for raising funds and that reeked of vindictiveness and oppression of minority shareholder rights.
On September 5, Tata Sons had moved the top court seeking to restrain the Mistry group from raising capital against their shares. It sought to prevent SP Group from creating any direct or indirect pledge of shares.
TSPL had earlier told the top court that it was not a ‘two-group company’ and there was no ‘quasi-partnership’ between it and Cyrus Investments Pvt Ltd.
TSPL had made the averments in an affidavit filed in the apex court while responding to the cross-appeal filed by Cyrus Investments seeking removal of alleged anomalies in the NCLAT order for getting representation on the TSPL’s board in proportion to the stakes held by his family.
Mistry had also filed an affidavit to the apex court saying the Tata Group had an adjusted net loss of Rs 13,000 crore in 2019 — the worst losses in three decades.
In his reply to the Tatas’ petition challenging his reinstatement by the NCLAT last December, Mistry had also demanded that group chairman emeritus Ratan Tata should reimburse all the expenses to Tata Sons since his departure in December 2012 in keeping with best global governance standards.
Mistry is seeking representation in the company in proportion to the 18.37 per cent stake held by his family, the cross-appeal has said.
Reinstating Mistry as the chairman, the NCLAT had also termed the action of the Registrar of Companies to allow conversion of Tata Sons into a private limited company illegal.
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In that case, the SP group, with its legendary wealth, could make a counter offer of 3.2 trillion for the remaining 82%.