Tata Sons Ltd and Shapoorji Pallonji Group seem reluctant to bury the hatchet, with the former now challenging Pallonji’s plan to raise funds by pledging shares in the Tata group. Pallonji Group plans to raise $1 billion by pledging its shares in Tata Group, though the talks are in early stages. The Shapoorji Pallonji family family owns 18.37 per cent stake in Tata Sons.
Tatas plan to invoke Article 75 of Tata Sons’ Article of Association, according to which it has the first right to buy shares if any of its shareholders sell them via a special resolution, Mint reported. The real estate group facing fund crunch believes the Article of Association doesn’t stop it from pledging shares, the daily reported.
However, official statements from both the companies are yet to come. The Mistry group, during their court battle, had also termed Tata Sons’ Article 75 as draconian and confiscatory. The National Company Law Appellate Tribunal, in its December 18 judgement, had, however, told the Tata group not to exercise it “oppressively”.
The NCLT order also restored Cyrus Mistry as the executive chairman of the Tata Group, which opened another bitter chapter between the two business houses. The judgement also rendered N Chandrasekaran’s appointment as executive chairman of the company “illegal”. Cyrus Mistry, a member of the Shapoorji Pallonji family, had been engaged in a bitter legal battle with Tata Sons since his ouster from the board back in October 2016.
On January 25, a three-judge bench headed by Chief Justice Arvind Bobde stayed the NCLAT order. The stay came on an appeal filed by Tata Group. Later, Cyrus Mistry moved the apex court seeking removal of many anomalies in the NCLAT order, saying his family deserved more relief from the tribunal.
Source- Business Today.