DEBT CHALLENGE

Eighty four years ago, the patriarch of Mumbai-headquartered Shapoorji Pallonji family and grandfather of 52-year-old Cyrus Mistry got a golden opportunity to buy 12.5 per cent stake in Tata Sons from F E Dinshaw Estate, a finance firm owned by F E Dinshaw which had provided the Tatas growth capital in their formative years. After Dinshaw died, his legal heirs sold the stake to construction magnate Shapoorji Mistry. Later, Mistry senior increased the stake to 16.5 per cent by buying from JRD Tata’s siblings.

Over the years, the Mistry family held on to the shares through thick and thin. In fact, Cyrus’s father, Pallonji Mistry, had to cough up a large sum in mid-90s to participate in Tata Sons’ rights issue, which increased the family’s stake to 18.4 per cent. The Tatas, however, claim that the Mistrys became shareholders only in 1965, that is, 55 years ago, by buying shares from Dinshaw Group. Whatever be the truth, such a large stake in a $110 billion group is a family treasure for the Mistry family that it is trying to monetise to get out of the financial crunch it is facing, much like the F E Dinshaw family scions had done decades ago.

The consolidated debt of Shapoorji