In the Tata-Mistry tussle, the Supreme Court on Tuesday restricted further fund raising by Shapoorji Pallonji group from pledging or transferring Tata Sons shares owned by them till October 28.
A bench headed by Chief Justice S.A. Bobde said the group should not take any further action on the shares, they have already pledged for raising funds.
Senior advocate C.A. Sundaram, representing Shapoorji Pallonji group, argued before the bench also comprising Justices A.S. Bopanna and V. Ramasubramanian that the other party is creating havoc on its fundraising plans, and the situation is coming to a stage, where my client is being blocked in every possible way.
Pallonji Group has 18.4 per cent shareholding of Tata Sons, and Tata Trusts owns 66 per cent stake in Tata Sons.
Counsel for Cyrus Mistry contended before the bench that banks were refusing to give credit in the backdrop of pendency of this plea, and cited that his client's company has nearly 60,000 employees.
The Pallonji group argued that there is a clear difference between pledging and transferring of shares, and Tata Sons is advertising the pendency of this plea and it having an impact on the company's effort to restructure loans with banks.
Senior advocate Harish Salve, representing Tata Sons, submitted before the bench that they are looking at creating mischief. Salve argued that if Pallonji group defaults, then banks could sell the pledged shares.
Salve urged the top court to stop the sale of shares and emphasized that in four weeks, the situation will be beyond repair, if Mistry is not stopped.
"If they want to sell, we are willing to buy. Pallonji group must be restricted from raising further funds by pledging shares," submitted Salve. The bench noted that it seems, Mistry is not ready to maintain the status quo.
After a hearing on the matter, the bench directed status quo should be maintained with respect to pledging, transferring, and further action on pledged shares. The bench has scheduled the next hearing on the matter on October 28.
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