The valuation of Shapoorji Pallonji group’s 18.37 per cent stake in Tata Sons would be ₹70,000-80,000 crore, much less than what the Mistry family is seeking, according to an estimation by the group.
This was stated by Tata Sons’ counsel Harish Salve before the Supreme Court on Tuesday.
In September, the SP Group had sought separation from the Tata group by selling its stake in Tata Sons. According to Mistry’s filing before the Supreme Court in the ongoing tussle, the 18.37 per cent stake in Tata Sons is valued at about ₹1.79-lakh crore. Tata Sons has the first right of refusal and will push for a much lower valuation.
Salve said that when the Tata group was under its former chairman Ratan Tata between 1991 and 2012, its market cap rose 500 times.
The decision to make Tata Nano, once hailed as the “world’s cheapest car”, was taken when the car industry was booming and the company wanted to give a car priced at ₹1 lakh. However, the project ran into trouble later. It got into problems in Bengal, and had to be shifted to Gujarat. This could be termed a bad decision, but not mismanagement, he added.
Pallonji Mistry, Cyrus Mistry’s father, was appointed on Tata Sons’ board as non-executive director in 1980. Cyrus Mistry joined Tata Sons in 2006. His appointment as Executive Chairman would have ended in March 2017, Salve said.
Appointed by selection panel
The Tatas’ counsel also said Mistry was appointed as Executive Chairman by a selection committee in 2012, and not under any right of minority shareholding in the group.
“In ordinary circumstances, Mistry, with 18 per cent shares, will not get even a 1 per cent share in the board, that too in a private company,” he added. The Supreme Court will continue to hear the issue on Wednesday.
In December 2019, the National Company Law Appellate Tribunal had ordered Tata Group to reinstate Mistry as executive chairman, a post from which he was ousted following a boardroom coup in 2016. The case was then filed with the higher Supreme Court.