InvestorQ : Why have the Tatas rejected the Mistry proposal to give them proportionate ownership in the Tata Group company shares?
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Why have the Tatas rejected the Mistry proposal to give them proportionate ownership in the Tata Group company shares?

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sarah Leo answered.
12 months ago
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Even as the arguments in the Supreme Court on the Tata-Mistry case continued, the Tata counsel Harish Salve flatly rejected the Mistry offer of an outright share swap. When the issue of parting ways had come up, Mistry had suggested that he would be keen to surrender his Tata Sons shares in exchange for shares of group companies of Tatas.

There is already a major dispute brewing between the two powerful Parsi families over the valuation of the 18.4% stake of Mistry. Earlier, the Mistry family had pegged the value of their 18.4% stake in Tata Sons at $24 billion and had demanded for allotment of equivalent shares of the Tata Group on a pro-rata basis.

Tata group had two major objections; one on the valuation and second on the concept of pro-rata allotment of shares in the Tata group. On the subject of valuation of the Mistry stake, The Tata group has estimated the value of the Mistry stake in Tata Sons at around $11 billion, which is less than half of what the Mistry family has estimated.

Salve also added that the group dismisses any claims for equivalent and pro-rata stock allocation. Salve pointed that pro-rate stock allocation would mean the dispute spills over from Tata Sons to group companies; and that was not the whole purpose. The dispute between the Tatas and Mistry could drag on legally for a much longer period.

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