You are here: Home » Companies » News
Business Standard

Ratan Tata, Cyrus Mistry differed over listing of Tata Sons

NCLT to hear Mistry petition on the matter next month

Dev Chatterjee  |  Mumbai 

Ratan Tata, Cyrus Mistry, Tata Sons,
Ratan Tata and Cyrus Mistry

The (NCLT) is set to hear in early January a petition opposing plans to make Sons a private company. The petition has been filed by ex-chairman  

and Ratan Tata, chairman of Trusts, differed over fundraising plans of Sons just before the infamous spat between the duo erupted in October last year, documents filed before show. There were differences over plans to take Sons private this year as well.

In June 2016, rejected a proposal by Mistry, then Sons chairman, to issue bonus shares to Sons shareholders, saying it would lead to an additional liability for the parent company. Since 2014, Tata, in fact, was of the view that Sons should issue Differential Voting Rights (DVRs) with an overseas listing so that the company can meet its obligations. 

In a letter to on June 13, 2016, said the bonus issue of Sons would lead to the additional burden of Rs 300/350 crore per annum (assuming a bonus issue of Rs 4,000 crore). was responding to a suggestion by who suggested either selling shares to raise funds or offer bonus shares.

said any proposal to give something back to shareholders could be justified only if the company has large cash balances with no debt. “We have debated this in the case of and it was agreed by all concerned that the simplest way of doing this is to pay higher or special dividends to its shareholders, Sons does not qualify under the above parameters,” said.

When contacted, both Sons and the family declined to comment.

According to documents, first suggested listing Sons abroad in October 2014 with differential voting rights (DVRs) but his proposal was not supported by Mistry, who said along with the holding company status of Sons would lead to 30 per cent discount to the actual value of assets. 

Elaborating, replied to on June 18 that any discount of over 20 per cent over the underlying assets of Sons would be a loss of economic value to its shareholders. Mistry, whose family holds 18.5 per cent stake in Sons, said one had to look at structural ways such as putting aside a sum of money every year to do buybacks of shares if the discount widened. “We would have to do detailed disclosure of the governance at the decision-making process of the Trusts and the Sons board. 

A listing would create pressure from shareholders for short-term results limiting the ability of the group to invest in next generation of businesses. Post listing there would be pressure to list the company locally,” said. Many global investor bodies have denounced as investor-unfriendly, he had said.  

War of the Titans

October 2014: 
moots Sons to list abroad

May 2016: 
trusts withdraw Rs 4,000 cr from Sons for tax reasons

June 2016:  
opposes saying it leads to discount, offers bonus shares

rejects bonus share plans, says it will add to Sons burden

October 2016: 
removed as Sons chairman 

September 2017: 
Sons to go private, opposes in NCLT

First Published: Tue, December 12 2017. 01:12 IST