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Tata group, Mistry family part ways, ending a seven-decade relationship
- Sapoorji Pallonji, the largest minority shareholder in India’s Tata group, announced that its exit from the conglomerate
- The decision put an end to a bitter years-long battle that ensued with the ouster of former Tata chairman Cyrus Mistry
- Mistry became Tata Sons director in 2006 and later succeeded Ratan Tata as chairman in 2012
Shapoorji Pallonji group, the largest minority shareholder in India’s massive Tata group, on Tuesday announced that it would leave the conglomerate, putting an end to a bitter years-long battle that ensued with the ouster of former Tata chairman Cyrus Mistry.
The decision by the Shapoorji Pallonji(SP) group, of which Mistry is the managing director, will make room for holding company Tata Sons to buy the 18.4% stake in the company in order to bolster its control in India’s steel giant.
Mistry was axed from the post of the Chairman of Tata Sons in 2016 after Ratan Tata set about to curtail Mistry’s influence in the company.
The two companies have been embroiled in a protracted legal fight since then, however, the Tata Sons recently procured a court order banning the SP Group from using its stake to raise funds.
“Tata Sons has amplified its institutional efforts to suppress and inflict irreparable harm on the SP Group, in the midst of a global crisis triggered by the COVID Pandemic,” the construction firm said in a statement.
The company further added, “Today, it is with a heavy heart that the Mistry family believes that a separation of interests would best serve all stakeholders.”
The move is a culmination of a seven-decade relationship between the two companies, which descended into acrimony following Mistry’s removal from Tata Sons.
“This is a statement of divorce and basically (the SP group) is telling Tata group that they have the right of first refusal and can buy their shares,” Ajit Sharma, a Supreme Court lawyer and expert in company law, told AFP.
Mistry become Tata Sons director in 2006 and later succeeded Ratan Tata as chairman in 2012.
However, ties between the two companies deteriorated sharply following the dismissal of Mistry. Mistry later dragged Tata Sons to India’s National Company Tribune, claiming that he was unfairly relieved of his duties.
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