Cyrus Mistry’s valuation is unacceptable to Tata Sons, they have carried their own study and they see the figure to be much lower than that. Do you think that is going to be the next battle?
Whether it is going to be a battle or not is not the issue. The issue is that if they do not agree to the valuation, then this thing just does not go through. In other words, the Shapoorji Pallonji Group has agreed to sell their stake provided the Tatas accept the price. If the Tatas feel that the price which Shapoorji Pallonji expects is very high compared to their understanding of the value of their property, then the whole thing will just simply not go through. If it does not go through on October 20, when the matter comes up in the Supreme Court, again the judges will decide the issue on the basis of the petitions and the pleadings that have been filed so far. All that we had expected was that before 20th of October there would be some meeting point where they decide to come to a settlement and if that settlement is reached then consent terms would be filed in the Supreme Court so that no further proceedings will take place based on the petitions and counter petitions filed by the two parties.
Now if no such happens because of this valuation issue, then simply nothing will happen and on the 20th of October the Supreme Court will go ahead with the hearing of the petitions on merits and then take a view in the matter.
The seller always asks for something much higher and the other party always offers something lower and then you arrive at a middle ground. Just finding an independent valuer for Tatas should not be a challenge, one that would be acceptable to the other camp?
There is a practical difficulty. Even if there are people who have been dealing with the Tatas or with the Shapoorji Pallonji Group, we can expect them to take an independent view if they are professionals and they have to justify their valuations based on certain calculations.
One of the ways of doing it would be for both the parties to come together and pick up say three independent firms of repute who will value their shares and then in that case they can come to a consensus. Normally, valuation is an art, not a science and therefore one could then make an average of the valuations by those independent valuers and come to a figure. Even if this matter goes to court, ultimately it will be exactly the same procedure. The court is going to appoint valuers and valuation will then be the subject of negotiation between the parties.
So in any such process, there has to be a certain amount of negotiation and each party will then have to accept that, if they want to come to a settlement. If they do not want to come to a settlement that is a different thing but if both parties are eager to come to a settlement, then there is no choice but to accept the valuations of independent valuers and then reach a consensus. So whether the Supreme Court intervenes or whether they do it on their own, ultimately it is going to boil down to the same.