After so many days, yesterday the corona cases started showing downward trends and now in Maharashtra the number of new cases are less than the number of discharged cases on daily basis. Same is the situation in Mumbai. Now tally in Mumbai city is, number of cases 1.88 Lakhs, deaths 8555, active cases are now only aaprox 27,000.Only problem of Mumbai is its fatality rate, which is still hovering at 4.6% whereas as a total Maharashtra state’s fatality rate is 2.7%.
There is one big story relating to business and that is after over 70 years, Shapoorji Pallonji (SP) group, the largest minority shareholders in Tata Sons with 18.4% stake, on Tuesday sais that time has come to separate from Tata. Yesterday, the SP group in a press statement said ‘ It stated before the Supreme Court that a separation from the Tata Group is necessary due to potential impact this continuing litigation could have on livelihoods and economy. It was crucial that an early resolution is reached to arrive at a fair and equitable solution reflecting the value of underlying tangible and intangible assets.’
The Tatas and the SP group(owned by Mistry family) have been engaged in a bitter legal battle ever since Cyrus Mistry was sacked as Chairman of Tata Sons on October 2016. The Mistry family was in the midst of raising funds against security of their personal assets to meet the crisis arising from the global pandemic. This move was undertaken to protect the employees (60,00 nos) and migrant workers (100,000+ nos). They are asking SC’s permission for pledging their Tata sons share, for raising the funds.
The SC on 22nd Sept 2020, restrained the SP group from pledging or transferring their share in Tata Sons to raise money from the market, or taking any further action regarding pledged/transferred shares while scheduling final hearing on the Tata – Mistry legal tussle on 28Th Oct 2020. In layman’s language the issue between both the groups have been in the courts after Cyrus Mistry was removed as Chairman of Tata Sons. One of the major issue in their legal fight is that the contention of Tata group that SP group has pledged the shares of Tata Sons and raised almost Rs 5000 Cr from market, without taking permission of Tata Sons’ board.
Tat group had earlier said that’ admittedly The SP group’s two companies Cyrus Investments and Sterling Investments have acquired majority of their shareholding through bonus issues and right issues. In this way both these companies invested merely Rs 69 Cr and they have received dividends of Rs 872 Cr from Tata Sons from 1991 to 2016. The SP group first became shareholders of Tata sons in 1965 by acquiring 40 ordinary shares and 48 preferential shares of its paid up share capital, There after, over the years, Cyrus Investments and Sterling Investments acquired Tata Sons’ shares largely through bonus and right issue of shares, which have allowed them to reap great economic reward.
Tata Sons holds either majority or substantial minority stakes in tata group cos. Going only by the market value of these companies
- Market value of listed Tata group cos in which Tata Sons has share is Rs 12.6 Lakh Cr.
- Value of Tata Sons’ stake in listed cos is Rs 7.7 Lakh Cr
- Value of SP group’s 18.4% stake in the listed cos. Is Rs 1.4 Lakh Cr
As per the financial experts, it will not be easy for Tatas to raise money to buy our SP group amid this pandemic.
So lets us wait till 28th Oct 2020, and see how this legal tussle between two groups take shape.
Waiting for your comments/views/feed backs.
Anil Malik
Mumbai, India
23rd September 2020.
Vasanth Chandra
It is best for SP to exit Tata group as dispute has adverse effect on the health of business . Attention will be on fighting rather than on growth . As both warring lords are in agreement to exit ,hope an amicable exit formula will be thrashed out in the interest of all stakeholders of both the groups .
R. N. Mungale.
I totally agree with Mr. Vasantchandra.
It is good news about pandemic.