Mumbai: Shapoorji Mistry, chairman of Shapoorji Pallonji Group, has urged all Tata trustees to support the listing of Tata Sons, saying it could also pave the way for a deeper relationship between the two business houses.
The SP Group chairman’s comments came after Tata Trusts, headed by Mistry’s son-in-law Noel Tata, vehemently opposed the public listing of Tata Sons. For the debt-ridden SP Group, the listing of Tata Son will unlock the value of its minority stake in the holding company of the Tata group.
“I would like to see Tata Sons evolve into a modern, globally respected and publicly responsible holding company,” Mistry said in a public statement. “I therefore call on every part of the Tata group – the individual trustees, Tata Sons, its management, shareholders, employees and all other stakeholders – to come forward in a spirit of harmony and common purpose.”
Tata Trusts Chairman Noel Tata told the Tata Sons board on September 17 that he would block any decision to list the country’s largest company by revenue and instead suggested that the group’s holding company approach the Reserve Bank of India for at least three years to comply if a listing is ultimately necessary.
The board of Tata Sons also approved a third five-year term for N. Chandrasekaran as its chairman, which Noel Tata voted against.
Mistry urged Tata Trusts not to let the listing become a point of contention. Instead, he suggested using this as an opportunity for reconciliation, renewal and a stronger institutional future.
“This landmark decision should not be seen as a victory of one stakeholder over another. It should be seen as an opportunity to bring people and institutions together,” he said.
The centuries-old relationship between the two business houses hit a low point a decade ago when Mistry’s younger brother Cyrus was ousted as Tata Sons chairman by Ratan Tata in 2016.
“The relationship between Shapoorji Pallonji and the Tata group goes back over a hundred years. It has been built over generations through entrepreneurship, trust, shared experience and a deep understanding of the responsibilities that come with building institutions in India. Therefore, I look forward to not just resolving this chapter, but also forging closer partnerships, greater synergies and deeper relationships with Tata Sons and Tata Trusts in the years to come,” Mistry said in a statement.
Debt problems
The SP group first became a shareholder in Tata Sons in 1965 under patriarch Shapoorji Pallonji Mistry and continued buying shares over the next three decades until its stake reached 18.37%, making it the largest minority shareholder in the company.
But as SP Group’s financial position has become critical over the past decade, the only asset that could solve its debt problems – its stake in Tata Sons – remains illiquid as the company’s articles of association effectively prohibit any sale.
Mistry’s comments urging the Tata Trusts to support the listing came a day after Noel Tata. made a proposal at a meeting of the board of directors of Tata Sons on September 17 about the repurchase of 3% shares from SP Group for ₹25,000 crore, providing much-needed capital to the Mumbai business house.
SP Group’s total debt across its holding and operating companies is estimated to exceed ₹60,000 crore, according to media reports.
Mistry also praised the Reserve Bank of India and the Government of India for their commitment to Tata Sons list.
“I want to commend the RBI and the government for the clarity of purpose brought into this process and the discipline shown in keeping all institutions, irrespective of size or status, at the same level,” he said.
