InvestorQ : Why is Tata Sons filing an injunction after getting a positive verdict in the Mistry case?
diksha shah made post

Why is Tata Sons filing an injunction after getting a positive verdict in the Mistry case?

Answer
image
3 weeks ago
Follow

On Friday when a Supreme Court bench headed by Chief Justice Bobde delivered the judgment on the Mistry/Tata case, it clearly looked like a temporary win for the Tata group. After all, the Supreme Court in the process had quashed almost all the allegations made by the Mistry family and even held that the dismissal of Mistry as well as the appointment of Chandrasekharan as the chairman of Tata Sons was absolutely valid.

However, Tata Sons now proposes to file an injunction in the court to protect its future right of any pre-emptive purchase of its shares, assuming that such shares were pledged by the Shapoorji Pallonji Group. So, while the Supreme Court judgment on Friday was favourable for the Tatas, the legal team at India’s largest industrial conglomerate is worried about whether Supreme Court judgment also legitimized pledge of Tata Sons shares by SP group.

It may be recollected that the Supreme Court, while delivering its judgment, had dismissed all allegations made by Cyrus Mistry against the Tatas. However, in the process it also dismissed all interim applications made. This includes the application made by the SP Group seeking separation of its ownership interests in Tata Sons and also an application filed by the Tatas seeking to restrain SP Group from pledging or transferring Tata Sons shares.

This has resulted in a kind of legal grey area because the Tatas are apprehensive that the judgment may have also indirectly legitimized the pledge of shares of Tata Sons by the Mistry group. That is something the Tatas always wanted to protect their company against. Tatas may file an injunction to get clarity that they would continue to have the right to block any pledge of Tata Sons shares by the Mistry group. That is expected this week.

1 Views