The billionaire Mistry family, the largest minority shareholder of the Tata Group, said it needs to separate its interests after India’s biggest conglomerate took steps to block the family’s attempt to borrow money against Tata shares.
Tata Sons Pvt. informed the Supreme Court Tuesday that it’s open to buying out the 18% stake owned by the Mistry family’s cash-strapped Shapoorji Pallonji Group if the latter needed to raise money for paying maturing debt. The SP Group instead wanted to borrow funds using the shares as collateral, a move Tata considers as potentially risky because the securities may end up falling in the hands of unfriendly investors.
“The action by Tata Sons to block this crucial fund raise, without any heed for the collateral consequences, is the latest demonstration of their vindictive mind-set,” the SP Group said in a statement late Tuesday. “The SP-Tata relationship spanning over 70 years, was forged on mutual trust, good faith, and friendship. Today, it is with a heavy heart that the Mistry family believes that a separation of interests would best serve all stakeholder groups.”
It didn’t specify what any separation would entail. A representative for Tata Sons declined to comment.
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