Order book reached zero under Mistry: SP group

The Shapoorji Pallonji group has claimed that its order book from the Tata group had reached zero value in the financial year ended March 2016. The construction major, led by Cyrus and Shapoor Mistry, in a statement on Thursday said the Tata group’s move to snap all its business ties with them would not have any impact on its business. The SP group holds about 18.4 per cent in Tata Sons, the primary holding company for the group.

The Shapoorji Pallonji (S P) Group on Thursday said the Tata group’s move to snap all business ties with it would not have any impact as its order book from Tata companies had reached zero value in the financial year ending March 2016.

The S P Group, led by Cyrus and Shapoor Mistry, holds 18.4 per cent stake in Tata Sons, the primary holding company of the Tata group. Cyrus Mistry was ousted as Tata Sons chairman in October last year following a bitter boardroom battle. He had become a director of Tata Sons in September 2006, a year after his father retired from it.

The order book for the construction major from the Tata group in that financial year was ~659 crore. It rose to ~1,124 crore in 2012-13, the year Mistry took over as Tata Sons chairman from Ratan Tata in December. The S P Group was a contractor for key Tata group projects such as the new plant for Tata Steel at Kalinganagar.

“Orders from the Tata group fell from ~1,124 crore in 2012-13 to zero in 2015-16, when Mistry was the chairman of Tata Sons. Any residual orders pending are extremely insignificant in value for the S P Group,” said a statement from the S P Group.

The orders from the Tata group going to the S P Group was one of the reasons cited for ouster of Mistry by Tata Sons. The Tata Sons board, under the new chairman N Chandrasekaran, has instructed its group companies to snap all business relations with the S P Group amid a legal tussle at the National Company Law Appellate Tribunal (NCLAT).

“Mistry had, when he was chairman of Tata Sons, issued a directive in November 2013 to all Tata group companies to ensure that no new engineering and construction contracts were awarded to the S P group, during his tenure,” the statement said.

The move from Tata Sons means that the battle between the two groups has seen no signs of abating. After resigning from the boards of listed Tata group companies, Mistry had filed a suit in the National Company Law Tribunal (NCLT) against Tata Sons for “oppression and mismanagement” in the Tata group holding company. The NCLT found the petition non-maintainable.

Under the new Companies Act, shareholders are required to hold 10 per cent equity to be qualified to file such a petition. The two Mistry firms own a combined 18.4 per cent of ordinary equity shares of the Tata group holding firm, but their holding falls below 10 per cent when preference shares are taken into account. According to the Tata group, Mistry firms hold only about 2.17 per cent.

The two Mistry firms, Cyrus Investments and Sterling Investments, then moved the NCLAT against the NCLT order that the original petition was non-maintainable. The NCLAT has heard the arguments of both the sides and is expected to come with its order now.