The 18.37% stake owned by Shapoorji Pallonji Group (SPG) is not worth more than Rs. 70,000-80,000 crore, Tata Sons told the Supreme Court on Tuesday. This valuation is less than half of SPG's estimation of Rs. 1.75 lakh crore. The submission came as the top court was hearing final arguments on a plea challenging the December 18, 2019, National Company Law Appellate Tribunal (NCLAT) order which reinstated SPG scion Cyrus Mistry as the Executive Chairman of the Tata Sons.
Senior advocate Harish Salve, representing the Tata Group of companies, also junked allegations of mismanagement within the company. A member of Tata Sons cannot complain or make allegations about other Tata companies. There has never been a single allegation of mismanagement of Tata Sons," Salve told a bench led by Chief Justice of India SA Bobde.
"The company has been run amazingly. During the tenure of Mr. Ratan Tata between 1991 and 2012, the market cap of Tata went up 500 times," Salve added. "When there is a growth story of 500 times, there will be some winner projects and some losers," he added.
The Tata-Mistry dispute began when Cyrus Mistry—who succeeded Ratan Tata in 2012—was ousted four years later. The NCLAT in December 2019 had termed the decisions to remove Mistry and the appointment of N Chandrashekar—his successor as illegal.
Does the Tribunal have the power to appoint/remove directors: SC to Salve
CJI Bobde primarily questioned the scope of NCLAT and whether it had suo motu powers or if the tribunal had the authority to appoint or remove a managing director/chairperson to a company.
Responding to the top judge's query, Salve said that the tribunal's power to remove a chairperson or a managing director was absolute. But it could only appoint someone in such a position under certain conditions/situations. These appointments, Salve insisted must be pro tem and ultimately a chairperson must be appointed by the shareholders.
"…democracy must come back and the shareholders must appoint those who they have trust in...," Salve added.
The matter was adjourned for the day and will be taken up for further hearing tomorrow.