The two may not have spoken yet, but could Nusli Wadia’s withdrawal of defamation case against Ratan Tata lead to a possible reconciliation between the two corporate titans?
It is a good first step, but too soon to talk about mending ties, say industry watchers.
The development though has also led to another important question. Given the close ties that the three families - the third being the Mistrys - had for over a century, will the latest development have any bearing on the dispute between Cyrus Mistry and Tata Sons?
"It is too early to say now and extremely difficult to predict what could happen," says a senior executive close to the Tata Group. "At the same time, it is one positive development that has come about, since the National Company Law Appellate Tribunal (NCLAT) judgement in December," added another top official from the industry.
The NCLAT had reinstated Cyrus Mistry as the Chairman of Tata Sons, the holding company of the conglomerate. The order had also termed the appointment of present Chairman N Chandrasekaran, illegal.
Later, in the first week of January, a Supreme Court bench headed by Chief Justice of India (CJI) SA Bobde heard the defamation case that the Wadia chairman had filed in 2016, soon after he was ousted from the board of Tata Sons. Wadia had been vocal in his support for Mistry.
The bench asked Wadia and Tata to talk and settle the matter. "Can you not settle it? You are both mature people. Why can’t you end this? You are both leaders in your own right," the Chief Justice is reported to have said.
Reports, and sources, say that the two stalwarts have not spoken to each other, and their legal teams settled the matter. But surely, added one of the executives quoted above, the push would have come from the top.
Consequently, on January 13, the Wadia Group Chairman withdrew the defamation suit against Tata. The decision by the Indian-born British Parsi businessman came after Tata told the Supreme Court that he did not intend to defame Wadia.
The Wadia Group Chairman had sought damages of Rs 3,000 crore.
The three families share a rich legacy.
The Pallonji Group, which was founded in 1865, built some of the most iconic Tata buildings, including the Taj Mahal Tower. Mistry’s grandfather is said to have played a pivotal role in the construction of units for Tata Steel and Tata Motors.
Apart from the 18.7 percent stake in Tata Sons, the Mistry family also had a stake in Nowrojee Wadia & Co, which owned 7 percent shares of Bombay Dyeing, the Wadia Group flagship.
In the 1970s, when Neville Wadia - Nusli’s father - wanted to sell Bombay Dyeing, the move was supported by Pallonji Mistry, father of Cyrus. But it was JRD Tata, the then Chairman of Tata Sons, who helped the junior Wadia prevent the sale.
Nusli Wadia would return the favour when Ratan Tata took over at Tata Sons, helping the latter stamp control over the Group that had several satraps.
Their friendship turned sour when it was clear that Wadia, after initial reluctance, had formed a rapport with Cyrus Mistry.At present, it may be a tall order for anyone from the three families to resolve the ongoing tussle. It is the courts that have taken the lead. The Supreme Court, which had set aside NCLAT’s decision on January 10, will hear the matter in four weeks.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.