Tatas reply to Mistry group’s notice

By: |
September 19, 2020 2:00 AM

The SP group’s notice had come pursuant to Tata Sons filing an urgent application in the SC to restrain the promoters of the SP Group from raising funds by pledging Tata Sons shares as security.

The law firm asserted that Tata Sons having exercised its “legal rights” did not “owe any explanation to you or your clients for the reason why it has been filed or the process by which a decision was taken to file it.”Tata’s platform -- an e-commerce gateway for its consumer products and services ranging from beverages to jewelry and resorts -- may seek to compete with the ambitious plans of Ambani.

Expressing surprise at the Shapoorji Pallonji Group’s notice for damages against Tata Sons board members for allegedly blocking the Cyrus Mistry family from raising funds, the Tata group termed the allegations as “fertile imagination” of the Mistry group and also “an another meek attempt at tilting at windmills.”

Denying “all assertions, insinuations and allegations made against Tata Sons and its directors,” Delhi-based law firm Karanjawala and Company in its reply to the SP’s notice stated that “the allegations are an outcome of your clients’ (SP group’s) fertile imagination and is another meek attempt at tilting at windmills. It is most unfortunate that your clients have sought to resort to this needless diatribe concerning the bona fides and merits of the pending application.”

The law firm asserted that Tata Sons having exercised its “legal rights” did not “owe any explanation to you or your clients for the reason why it has been filed or the process by which a decision was taken to file it.”

It further said that Tatas’ application had set out the basis to assert that the conduct of the SP group had been to “try to overreach the court and an attempt to take undue advantage of an interim arrangement made in the court.”

“Even the basic duty of candour has been breached by your clients,” the law firm alleged. “We put you to strict notice that any attempt by your clients to undertake actions that would frustrate the interim-reliefs/prayers, would tantamount to overreaching of the judicial process… Beyond this response, we refuse to engage in any further exchange concerning the bona fides and merits of the application,” Karanjawala & Co said in its two-page reply.

The SP Group through M/S Desai & Diwanji advocates, had slapped a notice for damages against Tata Sons’ board members, individually and collectively, questioning their decision to block the Mistry family from raising funds against the shares they hold in the Tata group firm. The advocates had given three days’ time to the Tata board members to respond to whether oppressive action that caused prejudice to a minority shareholder was with their concurrence.

The family run firms’ – Cyrus Investment and Sterling Investment Corporation firms – stated that Tata’s application to block funding in the Supreme Court, after definitive documents were signed with a global investor (to raise `3,750 crore), showed the “vindictive, prejudicial and oppressive nature.”

The SP group’s notice had come pursuant to Tata Sons filing an urgent application in the SC to restrain the promoters of the SP Group from raising funds by pledging Tata Sons shares as security.

Tata Sons had sought a direction to the SP group, which owns 18.32% in Tata Sons, “to disclose on affidavit all the pledges, encumbrances or charges, direct or indirect, that may have been created” upon its shares or the shares of the two Mistry firms.

The Tata group and SP group are involved in a bitter legal battle after Mistry was sacked as the chairman of Tata Sons in 2016. Both the sides have filed appeals and cross-appeals against the NCLAT’s order in the Supreme Court.

While the top court on January 10 had stayed in entirety the NCLAT’s December 18 order that reinstated Cyrus Mistry as chairman of Tata Sons after calling his removal in October 2016 as “illegal,” it had, in May, sought response from the Tata group and its patriarch Ratan Tata on the cross-appeal by the Mistry-run family firms seeking proportionate representation for the SP Group on the Tata Sons’ board. The appellate tribunal while terming Tata Group’s actions against Mistry as “prejudicial” and “oppressive” had also termed Tata Sons’ move to turn into a private company from a public limited as unlawful, and had ordered its reversal.

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