Bombay (AFP)
The first minority shareholder of the Tata group on Tuesday announced its withdrawal from the Indian conglomerate, ending a bitter battle sparked by the ousting of the company's former CEO, Cyrus Mistry.
This decision by the Shapoorji Pallonji (SP) group, of which Mr. Mistry is the CEO, should pave the way for the takeover by the family holding company Tata Sons of the 18.4% share held by SP and thus strengthen its control over the juggernaut. whose range of activities goes from salt to steel.
The first CEO of this group over 150 years old who did not come from the ranks of the Tata family, Cyrus Mistry was dismissed in October 2016 due to his differences with Patriarch Ratan Tata, unhappy with the divestment strategy followed by his foal.
His unexpected dismissal had triggered violent settling of scores in public.
Not digesting his dismissal, Mr. Mistry had accused this emblematic conglomerate of mismanagement, concretizing his words by filing a complaint in court.
In turn, Tata Sons recently obtained a court order prohibiting the SP group from using its stake to raise funds.
"Tata Sons has stepped up its institutional efforts to suppress and inflict irreparable damage to the SP group, amid a global crisis triggered by the Covid pandemic," the company said in a statement.
"Today, it is with heavy hearts that the Mistry family believe that a separation of interests would best serve all shareholders," she added.
The move ends a seven-decade relationship between the two companies, which had deteriorated following the dismissal of Cyrus Mistry from the management of Tata.
"This is a declaration of divorce and basically SP is telling the Tata group (...) that it can buy its shares," Ajit Sharma, a Supreme Court lawyer and expert, told AFP. in corporate law.
Founded under the former British colonial regime, Tata is present in more than 100 countries.
The group owns the British companies Tetley Tea and Jaguar Land Rover, as well as the Anglo-Dutch steel company Corus.
© 2020 AFP