DoCoMo impasse: Siva group hopes for a settlement

It has defaulted on Rs 700-cr payment to Tata Sons for buyback of Tata Tele shares from DoCoMo

Enthused by the DoCoMo-Tata agreement, Chennai-based entrepreneur C Sivasankaran, who has defaulted on a Rs 700-crore payment to Tata Sons for buyback of Tata Teleservices shares from DoCoMo, expects a settlement with Tata Sons over their legal dispute.

After the Siva group had defaulted, Tata Sons led by the then chairman Cyrus Mistry had threatened to move court. But, before Tata Sons could go ahead with the litigation, the Siva group sent a legal notice to Tata Sons on September 19 last year, alleging oppression and mismanagement of Tata Teleservices. 

With a new management in place at Tata Sons, Sivasankaran, a close confidant of Tata group patriarch Ratan Tata, expected a settlement soon, a source in the group said.

“I am happy that it has finally come to an end. After this, Tata Sons will also treat with the same principles the other minority shareholders of the company,” Sivasankaran said.  

In November 2008, DoCoMo decided to buy a 26 per cent stake in Tata Teleservices at Rs 118 a share. At that time, the Siva group, along with Tata group companies, had sold a part of its stake to DoCoMo at a hefty premium. 

The agreement said if certain performance parameters were not met by Tata Teleservices, DoCoMo would sell its shares back to the Tatas and other sellers, including the Siva group, at a minimum of 50 per cent of its acquisition price.

Thereafter in 2014, as Tata Teleservices failed to make profits, DoCoMo exercised the put option. Tata Sons asked Sivasankaran to pay his share of the amount payable to DoCoMo. But the Siva group defaulted on the payment to Tata Sons.

An e-mail sent to Tata Sons did not elicit any response.

On September 15 last year, Mistry briefed the Tata Sons board about Siva group’s default and the board sought legal action. But in a surprise move, within four days, the Siva group sent a legal notice to Tata Sons, Tata Teleservices and DoCoMo, alleging oppression and mismanagement of Tata Teleservices.

Later, Darius Khambata, senior corporate lawyer, advised the Tata group not to take any action against the Siva group till the outcome of the DoCoMo litigation became clear. Khambata resigned from the Tata Trusts a day after Mistry was ousted from Tata Sons on October 24.