New Delhi, Sep 22 (PTI) Shapoorji Pallonji (SP) Group, the largest minority shareholder with 18.37 per cent stake in Tata Sons, on Tuesday said it is "time to separate from Tata" to end a relationship that has spanned over 70 years.
Tata Sons is the holding company of Tata Group.
In a press statement, the SP Group said: "It 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".
"They stated that it was crucial that an early resolution is reached to arrive at a fair and equitable solution reflecting the value of the underlying tangible and intangible assets," the statement added.
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.
"Tata Sons has amplified its institutional efforts to suppress and inflict irreparable harm on the SP Group, in the midst of a global crisis triggered by the COVID pandemic," the SP Group said.
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. This move was undertaken to protect the livelihoods of its 60,000 employees and over 1,00,000 migrant workers, it added.
"The action by Tata Sons to block this crucial fund raise, without any heed for the collateral consequences is the latest demonstration of their vindictive mind-set," the statement said.
Stating that the current situation has forced the Mistry family to sit back and reflect on the past, present and possible future for all stakeholders, the SP group said, "The past oppressive actions and the latest vindictive move by Tata Sons that impact the livelihoods of the wider SP Group community leads to the inexplicable conclusion that the mutual co-existence of both groups at Tata Sons would be infeasible".
The SP-Tata relationship, spanning over 70 years, was forged on mutual trust, good faith, and friendship. Today, it is with a heavy heart that the Mistry family believes that a separation of interests would best serve all stakeholder groups, it added.
When contacted, Tata Sons spokespersons declined to comment.
The SP Group claimed that as the largest minority shareholder owning an 18.37 per cent stake, the role hitherto played by it was always "one of guardianship with an aim to protect the best interests of the Tata group".
"The SP Group had always used its voting rights as a shareholder for the best interest of the Tata Group. It is a matter of record that prior to the year 2000, when the Tata Trusts, being Public Charitable Trusts, couldn't exercise their voting rights, the same being held by a Public Trustee, the SP Group voted to protect the best interests of the Tata Group," it said.
The statement further said that after Cyrus Mistry was appointed as Chairman of Tata Sons he set about trying to establish a governance structure that would institutionalise accountability, and create the right checks and balances, without contravening the new Sebi Insider Trading law that regulated the flow of information across all stakeholders.
"Unfortunately, he was removed in October 2016, when he attempted to implement these governance reforms," it added.
The statement by the SP Group further said, "It is extremely unfortunate that the current leadership of Tata Sons has not only continued to take value destructive business decisions in a misguided effort to prove a point in these proceedings".
It is a matter of public record that 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 crore or the Group's aviation businesses. These actions, or lack thereof, have meant that the total debt in the major Tata group companies has increased by approximately Rs 1,00,000 crore in the last three years, it added.
"Excluding TCS, the last quarter's losses of all the listed group companies of approximately 14,000 crores causes great concern. Unfortunately, the impact of these actions continue to hurt minority shareholders, be it the SP Group at Tata Sons or the millions of shareholders of the listed companies in the Tata Group," the statement said. PTI RKL BAL