In 2016 the fallout between the Tatas and SP Group occurred following Cyrus Mistry ousted as chairman of Tata Sons. with Noel Tata taking the charge of the Tata Trusts, the relationship between both the companies may..
After the sad demise of Ratan Tata, his half-brother Noel Tata took charge of the Tata Trusts. Positive news has now begun to emerge for the conglomerate, as the Shapoorji Pallonji Group and the Tata Group are reportedly making efforts to reconcile, seven years after their corporate dispute. A crucial meeting between the two major parties is expected to take place in the coming days, according to sources cited by The Hindu Businessline.
“We are hopeful that both sides can put the past behind and find a constructive way forward,” The Hindu Businessline quoted an industry source as saying.
Ratan Tata’s Death
Ratan Tata took his las breath at a Mumbai hospital on October 9. The chairman emeritus of the Tata Group was 86-year-old.
Fallout Between Tata And SP Group
The fallout between of a cordial relationship between both the major companies begun in 2016 when Cyrus Mistry fired as chairman of Tata Sons. Notably, Shapoorji Pallonji Group has the largest minority shares in Tata Sons (18 percent) and Cyrus Mistry’s appointment back in 2012 was seen as a continuation of the relationship between both the major companies. following his ouster, Mistry accused that Ratan Tata was interfering in the operations of Tata Sons even after his retirement. He alleged compromised governance and crucial decisions not taken on sound business judgment but on emotion.
“Both Cyrus Mistry and Ratan Tata have passed away, and the legal dispute has been resolved, with the Supreme Court ruling in favour of the Tatas. There is no reason to hold on to past grievances,” a source stated.
Crucial Role Of Noel Tata
Noel Tata could play a major role in bridging the Tata Group and SP Group together again. Known for his non-confrontational leadership style, Noel married to Aloo Mistry’s daughter and he can be a potential mediator between the two families.
“For the SP Group, reconciliation with the Tata Group could ease financial challenges and improve the response to their planned listing of infrastructure firm Afcons,” said a market analyst.
As per the analyst, relations between Tatas and the SP Group have witnessed improvement in recent time. At Tata Sons’ most recent annual general meeting, the SP Group’s representative even praised Tata’s growth, hinting that tensions have eased.
However, the major issue remains the SP Group’s Rs 3 lakh crore stake in Tata Sons. The SP Group wants to sell at least part of their stake, ideally through an IPO, which would provide them an exit. But Tata Group has rejected this idea. “It’s still early, and we’ll have to wait and see how things develop in the coming weeks,” said a source.