The Shapoorji Pallonji Group on Tuesday informed the Supreme Court that it would exit the Tata Group, ending a relationship that spanned over 70 years, PTI reported. Tata Sons is the holding company of Tata Group.

In a statement, the Shapoorji Pallonji Group, which owns a nearly 18.5% stake in holding firm Tata Sons through two investment companies, said that a separation was necessary due to the impact that “continuing litigation could have on livelihoods and the economy”.

The announcement was made hours after Tata Group informed the top court that it was open to buying out the 18% stake owned by the Mistry family’s cash-strapped Shapoorji Pallonji Group, if the latter needed to raise money to pay-off debts, according to Business Standard. The Tata Group, however, did not mention an evaluation timeline for the same.

The SP Group said it was crucial that an early resolution be reached to arrive at a fair and equitable solution reflecting the value of the underlying tangible and intangible assets. “The SP-Tata relationship spanning over 70 years, was forged on mutual trust, good faith, and friendship,” the statement said. “Today, it is with a heavy heart that the Mistry family believes that a separation of interests would best serve all stakeholder groups.”

The statement is a culmination of a prolonged legal battle between the groups, which began in 2016 after Cyrus Mistry was removed as Chairperson of Tata Sons. The two sides have also been locked in a legal tussle at the Supreme Court over Tata Son’s decision to restrain the Mistry family from raising capital against the shares it holds in the company.

The SP Group said the Mistry family were in the midst of raising funds against the security of their personal assets to meet the crisis arising from the global pandemic. “This move was undertaken to protect the livelihoods of its 60,000 employees and over 100,000 migrant workers,” it added. “The action by Tata Sons to block this crucial fund raise, without any heed for the collateral consequences is the latest demonstration of their vindictive mind-set.”

“The past oppressive actions and the latest vindictive move by Tata Sons that impact the livelihoods of the wider SP Group community leads to the inexplicable conclusion that the mutual co-existence of both groups at Tata Sons would be infeasible,” the company said.

The statement added that as the largest minority shareholder, the SP Group had played the role of “guardianship with an aim to protect the best interests of the Tata group”.

“The SP Group had always used its voting rights as a shareholder for the best interest of the Tata Group,” it said. “It is a matter of record that prior to the year 2000, when the Tata Trusts, being Public Charitable Trusts, couldn’t exercise their voting rights, the same being held by a Public Trustee, the SP Group voted to protect the best interests of the Tata Group.”

The dispute

Mistry, who is from the Shapoorji Pallonji family, took over as the sixth chairperson of Tata Sons from Ratan Tata in 2012. However, the two reportedly fell out over key investment decisions. Mistry stepped down from all Tata Group companies in December 2016, two months after being sacked as chairperson. He accused Ratan Tata of staging “an illegal coup” while the Tatas alleged Mistry had misled the 2011 selection committee set up to appoint Tata’s successor.

The same month, Mistry and his family-run investment firm Cyrus Investments approached the company tribunal, as minority shareholders, against Tata Sons and 20 people, including Ratan Tata. On February 6, 2017, the shareholders of Tata Sons voted to remove Mistry from the post of director. This came a month after Chandrasekaran was appointed to succeed Mistry.