There was no lack of probity on Tata Group’s part when it issued Tata Teleservices Ltd’s (TTSL) shares to Chennai-based serial entrepreneur C Sivasankaran. Also, all Tata Group firms had done well during former Chairman Ratan Tata’s tenure. These were stated on Wednesday by Tata Sons’ counsel Harish Salve before the Supreme Court, which is hearing the final arguments in the Tata-Mistry case.
Former Tata Group Chairman Cyrus Mistry, who was ousted following a boardroom coup in 2016, had earlier accused the Group of providing undue favours worth ₹600 crore to Sivasankaran. Mistry, in his filing before the National Company Law Tribunal’s (NCLT) Mumbai Bench, had stated that TTSL was influenced in 2006 to issue shares to entities controlled by Sivasankaran at a “throwaway” price.
Sivasankaran’s firm Sterling Infotech Ltd was allocated TTSL’s shares at ₹17 a share in February 2006. Mistry had alleged discrepancies because, less than a fortnight later, in March 2006, Singapore government-owned investment firm Temasek Holdings was allocated TTSL shares at a higher price of ₹26 a share.
As per Mistry’s filings before the NCLT, this was red-flagged by Tata Sons’ legal team in a communication to Sivasankaran’s lawyers on October 20, 2016, just four days before Mistry’s ouster. TTSL has denied all the allegations.
Hike in valuation
Salve also told the apex court that the valuation of Mistry family’s holding in Tata Sons went up to ₹58,000 crore in 2016 from ₹69 crore in 1965, and yet he was complaining that Ratan Tata ran the company badly.
In his NCLT filing, Mistry had alleged that Sivasankaran was provided a penthouse on rent from the group for less than half-the-market rate. Salve said today there was no lack of probity there either. He added that Mistry’s kin was also given a penthouse on the same terms.
The Tata counsel also stated that Cyrus Mistry was initially inducted as Deputy Executive Chairman to work under Ratan Tata, before he took over from Tata — the first time someone not from Tata Trusts being given the position of Tata Sons’ chairperson.
The Mistry group is being represented by senior advocate C Aryama Sundaram. The apex court will continue to hear the issue on Thursday.