Tatas v/s Mistry: Shapoorji Pallonji threatens to file for damages against Tatas
Tatas v/s Mistry: Shapoorji Pallonji threatens to file for damages against Tatas

Opening a new front against the Tatas, the Shapoorji Pallonji Group has alleged irregularities and conflict of interest in Tata Projects Ltd's winning bid to construct the new Parliament building but the allegations have so far not found much favour with the concerned government department, sources said.

In yet another flare up in the ongoing war between the Tatas and the SP Group since the sacking of Cyrus Mistry as the chairman of Tata Sons in October 2016, the Mistry family group has written letters to the Central Public Works Department (CPWD) alleging that the participation of both Tata Projects Ltd (TPL) and Tata Consulting Engineers in the process was a violation of the Central Vigilance Commission (CVC) rules.

Moreover, the pre-qualification bid criteria was tweaked so as to make it possible for TPL to take part in the bidding process, the SP Group has claimed.

However, sources said the allegations of the SP Group have been rejected in a letter by the CPWD.

When contacted, both SP Group and Tata Projects Ltd declined to comment. CPWD also did not comment on the matter.

In September this year, Tata Projects Ltd won the bid to construct a new Parliament building at a cost of Rs 861.90 crore ahead of L&T Ltd which had submitted a bid of Rs 865 crore.

Out of seven companies shortlisted, only three -- Tata Projects, L&T and SP Group -- were selected for the final round of bidding.

According to sources, SP Group did not participate in the final tendering process.

The new Parliament building will be constructed close to the existing one under the Central Vista redevelopment project, and it is expected to be completed in 21 months.

As per the CPWD, the new building will come up at plot number 118 of the Parliament House Estate and the existing Parliament building will continue to function during the entire period of execution of the project.

In its ongoing battle with the Tatas, last month the SP Group, the largest minority shareholder in Tata Sons with 18.37 per cent stake, said it was "time to separate from Tata" and end a relationship that has spanned over 70 years.

Tata Sons is the holding company of the over USD 100 billion conglomerate Tata Group. It had objected to the SP Group's plans to raise funds by pledging shares of Tata Sons.

The Mistry family, however had stated that it was "in the midst of raising funds against the security of their personal assets to meet the crisis arising from the global pandemic".

The Mistry family-led group had alleged that Tata Sons "amplified its institutional efforts to suppress and inflict irreparable harm on the SP Group, in the midst of a global crisis triggered by the COVID pandemic".

In other news, Tata Group on Thursday said it has not received any formal request or proposal from the SP Group till date regarding the latter's desire to separate from it.

On September 22, the SP Group had issued a statement saying it is time to separate from the Tatas after the Supreme Court disallowed it to pledge any Tata Sons shares.

"This statement has resulted in considerable confusion and speculation in the media," Tata Sons said in a statement.

Tata Sons is the holding company of the Tata group, in which the SP Group is the single largest minority shareholder with an 18.37 per cent stake.

"Tata group states that they have till date not received any formal request or proposal from the SP Group on this matter," the statement said.

In any event, since the matter is sub-judice before the Supreme Court, Tata Sons said it "will wait for the court proceedings to resume, which are scheduled for October 28".

Tata Sons had objected to the SP Group's plans to raise funds by pledging shares of Tata Sons.

However, the Mistry family had stated that it was "in the midst of raising funds against the security of their personal assets to meet the crisis arising from the global pandemic". The Mistry family-held SP Group had alleged that Tata Sons amplified its institutional efforts to suppress and inflict irreparable harm on the SP Group, in the midst of a global crisis triggered by the COVID pandemic.

The SP Group said the action by Tata Sons to block the "crucial fund raise, without any heed for the collateral consequences, is the latest demonstration of their vindictive mindset".

It said the current situation has forced the Mistry family to sit back and reflect on the past, present and possible future for all stakeholders. "The past oppressive actions and the latest vindictive move by Tata Sons that impact the livelihoods of the wider SP Group community lead to the inexplicable conclusion that the mutual co-existence of both groups at Tata Sons would be infeasible," the SP Group had said.

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