The Tatas on Wednesday countered in the Supreme Court, the accusation of mismanagement of Tata Sons and said that even according to the claim of Shapoorji Pallonji (SP) group, valuation of the latter’s 18.37% stake in the company rose from ₹58,000 crore in 2016 to ₹1.75 lakh crore in 2020.
The Tata firms told the top court that unless the losses were so enormous and there was a lack of probity which left no other option but to remove the majority shareholders of the company, the NCLAT could not have reached the conclusion including that of restoring Cyrus Mistry as executive chairman.
A bench of Chief Justice S.A. Bobde and Justices A.S. Bopanna and V. Ramasubramanian was told by senior advocate Harish Salve appearing for the Tatas that in the cross appeal which they had filed in the top court, SP Group had claimed that that the value of their shares as ₹1.5 lakh crore.
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He said that according to an application filed by them (the Mistry side) in which they had sought 18% in all downstream Tata companies; the value of their share was ₹1.75 lakh crore. So, if one were to go by SP Group’s claims, it was ‘a strange management’ which had mismanaged the company but still took their valuation from ₹58000 crore in 2016 to ₹1.75 lakh crore in 2020, Mr. Salve said.
The bench is hearing 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 more than $100 billion salt-to-software Tata conglomerate. Mr. Salve referred to allegations of undue favour to businessman C. Sivasankaran — who was granted contracts by Tata Teleservices — and said that all transactions had been purely commercial and there had been no lack of probity in any of them.
He said Pallonji Mistry is a business man of eminence and had been with the Tata group till 2004 and there was no issue with any of the decisions taken then.
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Cyrus Mistry had joined in 2006 and did not have any disagreement till 2012, Mr. Salve said. The bench asked Mr. Salve whether his argument was that the NCLAT did not look at the probity aspect and therefore it could not have concluded that it was just and equitable to wind up. Mr. Salve replied ‘yes’ and said the judgement of the tribunal did not justified itself or gives the basis on which the conclusion was arrived at.
‘Remains inconclusive’
Mr. Mistry had contended in the NCLAT that he had been removed because of his efforts to remedy past acts of mismanagement.
The hearing remained inconclusive and would continue on Thursday.
On Tuesday, Tatas had said the valuation of 18.37% shares owned by the SP Group in Tata Sons is between ₹70,000 crore and ₹80,000 crore.