Read the full statement from the Mistry family

Tata Sons Pvt. On Tuesday informed the Supreme Court that it is open to buying the 18% stake that belongs to the liquidity-strapped Shapoorji Pallonji group of the Mistry family, if the latter needs to raise money to pay off overdue debt. . Instead, the Shapoorji Pallonji Group wanted to borrow funds using the shares as collateral.

“Tata Sons’ action to block this crucial fundraiser, without paying attention to the collateral consequences, is the latest demonstration of its vindictive mentality,” the Shapoorji Pallonji Group said in a statement. 70 years old, it was built on mutual trust, good faith and friendship. Today, the Mistry family believes with great regret that a separation of interests would better serve all interest groups, “the SP group said in its statement.

Here is the full statement from the Shapoorji Pallonji Group

Today, the SP Group declared before the Supreme Court that a separation from the Tata Group is necessary due to the potential impact that this ongoing litigation could have on livelihoods and the economy. They stated that it was crucial that an early resolution be reached to reach a fair and equitable solution that reflects the value of the underlying tangible and intangible assets.

As the largest minority shareholder with a stake of 18.37%, the role that the SP Group has played until now has always been one of guardianship with the aim of protecting the best interests of the Tata group. The SP Group has always used its voting rights as a shareholder in the best interest of the Tata Group. It is a matter of record that before the year 2000, when the Tata Trusts, being Public Charity Trusts, could not exercise their voting rights, the same ones that had a Public Trustee, the SP Group voted to protect the best interests of the Tata Group.

In 2012, when Mr. Cyrus Mistry accepted the position of President of Tata Sons, it was not only with a sense of pride, but also with a sense of duty as an “insider” on the Tata Sons Board. The Tata Group was going through a significant change. A generation of Tata leaders was retiring with implications for the future governance of the Group. Several of these leaders who were retiring from the Tata Sons Board also served as trustees for the majority shareholders – Tata Trusts. It is in this context that Mr. Mistry set out to try to establish a governance structure that would institutionalize accountability and create the correct checks and balances, without contravening SEBI’s new insider trading law that regulated the flow of information. between all interested parties. Unfortunately, he was ousted in October 2016, when he tried to implement these governance reforms.

It is extremely unfortunate that the current leadership of Tata Sons has not only continued to make destructive business decisions of value in a misguided effort to prove a point in these procedures. It is a matter of public domain that various problems identified years earlier continue to plague the group. Whether it’s the operations of Tata Steel UK, where operating losses have increased by an additional 11 billion rupees in the last three years alone, or the Group’s aviation businesses. These actions, or the lack of them, have meant that the total debt of the main companies of the Tata group has increased by approximately ₹100,000 million rupees in the last three years. Excluding TCS, losses in the last few quarters of all listed group companies of approximately Rs 14 billion are causing great concern. Unfortunately, the impact of these actions continues to hurt minority shareholders, be it the SP Group in Tata Sons or the millions of shareholders of publicly traded companies in the Tata Group.

Tata Sons has expanded its institutional efforts to suppress and inflict irreparable damage to the SP Group, amid a global crisis triggered by the COVID pandemic. The 150-year-old SP Group is the second largest construction group in the country, executing projects of national importance in India and abroad. The Mistry family was in the middle of raising funds against the security of their personal property to face the crisis resulting from the global pandemic. This measure was carried out to protect the livelihoods of its 60,000 employees and more than 100,000 migrant workers. Tata Sons’ action to block this crucial fundraiser, without heeding the collateral consequences, is the latest demonstration of their vindictive mentality.

The current situation has forced the Mistry family to sit down and reflect on the past, present, and possible future of all stakeholders. Past oppressive actions and the latest vengeful move by Tata Sons impacting the livelihoods of the wider SP Group community lead to the inexplicable conclusion that the mutual coexistence of both groups in Tata Sons would be unfeasible. The SP-Tata relationship, which spans more than 70 years, was forged on the basis of mutual trust, good faith and friendship. Today, the Mistry family regretfully believes that a separation of interests would better benefit all stakeholder groups.