As the stake sale dispute between Mistrys and Tatas takes a new turn, Shapoorji Pallonji Group has announced that it is set to exit the Tata group. In a statement on Tuesday, the former said that "a separation of interests would best serve all stakeholder groups". The statement comes close on the heels of a Supreme Court order that has barred Shapoorji Pallonji Group from pledging or creating encumbrances on shares of Tata Sons.
"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," Shapoorji Pallonji Group said.
Shapoorji Pallonji Group and Tata Sons, the holding company of Tata group companies, have been engaged a longstanding tussle that started with the ouster of Cyrus Mistry as the latter's Chairman in October 2016. Recently, SP Group was trying to raise funds by pledging part of its stake in Tata Sons to service maturing debt. Tata Sons had filed an emergency application challenging the move.
On Tuesday, Tata Sons had informed the Supreme Court that it is willing to buy SP Group's stake to help them raise capital. The conglomerate led by the Mistry family holds 18.37 per cent stake in Tata group through its two subsidiaries - Cyrus Investments and Sterling Investment. Tata Sons owns rest of the stake through its group companies and trusts.
A Supreme Court bench of Chief Justice SA Bobde and Justices AS Bopanna and V Ramasubramanian, in its order on Tuesday, has asked both parties not to take any further steps in this regard till October 28, the next date of hearing in the matter.