Slim chances of SP Group getting SC reprieve: Lawyers on review petition

The legal fracas is just posturing by SP Group to get a better valuation of its stake in the conglomerate, says a lawyer

The Shapoorji Pallonji group’s review petition in the Supreme Court will be an important milestone in the ‘Tata versus Mistry’ legal fight, with lawyers saying that very few review petitions succeed at the apex court.

 

“The overturning of the NCLAT judgement by the Supreme Court threatens to loom large over the head of the Shapoorji Pallonji group. Alleging that the Supreme Court has failed to consider all allegations pertaining to oppression and mismanagement at Tata Sons, the Shapoorji Pallonji group has filed a review petition. It is pertinent to note that the scope of review petition is limited as the petition is admitted only when there is discovery of new and important matter or evidence, or when there is an apparent mistake or error on the face of the record. In the present case, the Supreme Court has considered all the presented facts, including oppression and mismanagement of minorities, therefore restricting the admission of the same,”  said Sonam Chandwani, Managing Partner at KS Legal & Associates.

 

The Mistry petition has pointed out some alleged errors in the judgment that diluted the powers of the Companies Act, especially with respect to the power and responsibilities of independent directors as well as trust nominees.

 

“It will be interesting to see what the decision of the Supreme Court will be, considering that former CJI S A Bobde has retired,” said another lawyer.

 

In its March 26 order, the Supreme Court had set aside the National Company Law Appellate Tribunal (NCLAT), and ruled in favour of Tata Sons, the holding company the Tata group.

 

According to the articles of association of Tata Sons, the trust nominated directors have the veto power over the decisions to be taken by the holding company, even if its stake falls up to 40 per cent. The Trusts own 66 per cent stake in Tata Sons while the Mistry family own 18.4 per cent stake. 

 

Lawyers said that yet another battle was now brewing between the two friends-turned-foes over the valuation of Mistry’s stake in the company.

 

While the Mistry group has sought Rs 1.76 trillion for its stake, the Tata group has pegged valuation of the same at only Rs 80,000 crore.

 

“There is a complete mismatch over the valuation, and the legal fracas is just a posturing to get a better valuation. Both sides have a long haul ahead,” said a Mumbai-based lawyer.