Tata counsel refutes allegations on share purchase deal with Sivasankaran

Abhishek Manu Singhvi argued that it was Shapoorji Group and not Siva who benefited from the sale of shares to Docomo

At the hearing at the  Mumbai bench of National Company  Law Tribunal (NCLT), Tata Sons’ counsel on Friday refuted allegations by Mistry's family investment firms with regard to allotment of shares of Tata Teleservices to S Sivasankaran (Siva) in 2006, the Seychelles-based businessman, at a discounted rate. He also dismissed submissions by Mistry’s counsel, Aryaman Sundaram, on financial support given to Siva by Tata Sons for the share purchase.  Abhishek Manu Singhvi, Tata Sons ’counsel, argued that on contrary it was Shapoorji Group and not necessarily Siva who benefited from the sale of shares to Docomo.

Sundaram stated that the shares of TTSL given to the Mistry Group was part of the offer made to all shareholders of Tata Sons – in line with what is offered to all Tata Sons shareholders in all Tata companies.

Singhvi said that while Siva was allotted shares at Rs 17 and, three months later, private equity player Temasek was offered shares at Rs 26, precisely two months before Siva invested, the Shapoorji Group invested at Rs 15 - on terms much more favourable than what was offered to Siva. The Tata counsel argued that it was Shapoorji Group and not Siva, necessarily, who benefited from the sale of Shares to Docomo.  The purchase for Shapoorji Group, he added, came at a lower price and got the benefit of their shares being sold to Docomo.

Mistry’s investment firms — Cyrus Investments and Sterling Investments — in their National Company Law Tribunal suit have alleged that dealings with Sivasankaran resulted in Tata Sons and TTSL incurring huge losses and liabilities. It added that Mistry was removed as chairman because he was trying to legally move against Sivasankaran.

Singhvi argued that it was in October, 2013 that Mistry directed his legal department to undertake a due diligence of the Siva-related issues. The report found no wrongdoings and Mistry in October, 2013 acknowledged to Siva the long term relationship between Siva and Tata Group.

The Tribunal asked Tata counsel what was special about Siva that Tata’s had to provide financial support. To this, Tata counsel also submitted that barring a 10-day advance, which was repaid within the 10-day period, Tata Group did not offer any financial support to Siva to acquire shares of TTSL when the discounted allotment was made.

Mistry’s counsel remarked that the reference to Mistry’s legal department is wrong and the note was actually a note from the Tata Sons' legal department when Mistry was the chairman and the note “was not a clean chit to Siva”. According to Mistry’s counsel, the argument would be that Mistry was aware and that he would deal with it in rejoinder to show how he dealt with it.