MUMBAI: In a coup against the Shapoorji Pallonji group, the Supreme Court on Tuesday ordered a status quo on creating pledges or liens on the shares of Tata Sons. The Shapoorji Pallonji group had been pledging shares it had in Tata Sons to raise funds.
The hearing has been postponed for four weeks and the matter will be heard again on October 28.
On September 5, Tata Sons filed an “urgent” request with the Supreme Court to prevent the promoters of the Shapoorji Pallonji Group from raising capital by pledging their shares in Tata Sons. She had argued that any pledge would amount to the transfer of shares and, according to company bylaws (AoA), the Tata Sons board has the first right to buy the shares at fair market value.
The SP group, through its two investment firms, Cyrus Investments and Sterling Investments, has an 18.4% stake in Tata Sons.
According to the statement, Cyrus Investments has pledged its full 9.19% stake in Tata Sons. Of this 7.5% committed to Axis Trustee to ₹825 crore in January and February of this year. In April, the charge was modified to guarantee a loan of ₹3,958 crore. An additional 1.83% interest was pledged with the IDBI Trusteeship to secure a loan of value ₹1,117 crore.
The SP group has been struggling to pay off its debt after its core businesses, real estate and infrastructure, suffered a crisis due to the pandemic.
You have missed a deadline to reimburse the fees to the group company Sterling and Wilson Solar Ltd. The developers have only paid ₹103 crore from ₹Rs 1 billion owed to the company, which is due this month.
Lead attorney CA Sundram, appearing at the firm of Cyrus Mistry, argued that Tata Sons’ actions in preventing it from pledging shares are causing havoc. “I’m locked in on everything,” Mistry’s attorney said. He added: “We have 6,500 employees and thousands of migrant workers to take care of.”
Lead attorney Harish Salve and Abhishek Manu Sighvi appeared for Tata Sons.
“He would have the right to buy their shares at market value. If they need money, we will buy it,” Salve said, adding that Mistry has been up to mischief and urged the supreme court to stop selling shares.
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