Ever since Tata Sons Ltd, the holding company of the Tata Group, sacked Cyrus Mistry as its chairman in October, the role of various family members and close associates of the Tata and the Mistry families has come under the media’s glare.
One such person is Mehli Mistry, who owns M Pallonji & Co, a sub-contractor for Tata Power Co Ltd and other companies. In an interview published in The Economic Times on Thursday, Mehli said his cousin Cyrus will “go down as lame duck†of Bombay House, the headquarters of the Tata Group.
But who really is Mehli Mistry?
Mehli is related to Cyrus from both his mother’s and father’s side. While their mothers are sisters, their fathers were first cousins. The ET report says that Mehli’s and Cyrus’ maternal grandmother lived in England, where Mehli’s mother was born just before the second world war. The report says the family left England to take shelter in Ireland during the war, where Cyrus’ mother was born. This is what explains why Mehil has a UK passport while Cyrus has an Irish one.
What are Mehli’s business interests?
According to a 21 November report in Business Standard, Mehli Mistry manages about a dozen companies which operate in businesses ranging from logistics to paint distribution and from auto to travel. Citing details available with the Registrar of Companies, the report says that till recently he was on the boards of as many as 14 companies and that his first board stint may have actually begun as far back as 1976, when he was just 16.
What does M Pallonji and Company actually do?
The website of M Pallonji and Co, the flagship group firm says that it is “primarily engaged in contracting and has site offices all over India.†“With industrial coating and painting as our forte, we have undertaken major contracts for power generating stations (hydroelectric and thermal), chemical and fertiliser factories, petroleum refineries, offshore oil and gas platforms,†it says, adding that it works with various companies including oil and gas major ONGC.
Interestingly, as the Business Standard report notes, the company’s top line grew nearly five times during Cyrus Mistry’s stint as the chairman of the Tata group, from just over Rs 42 crore in 2010-11 to Rs 206 crore in 2014-15 while a loss of just under Rs 50 lakh turned into a profit of more than Rs 43 crore in the same period. A bulk of its business comes from the Tata group itself.
The company, which was founded in 1950, had a net worth of just Rs 4 crore in 1995, according to a 21 November ET report. In September 2004, it got a barging contract from Tata Power, without apparently having had any previous experience of barging. The company also has other big-ticket contracts with Tata Power.
So, why is Mehli at loggerheads with cousin Cyrus?
The 21 November ET report says that while their relations were cordial till a few years ago, things changed after Cyrus became the Tata group chairman. Citing unnamed sources, the report says that Cyrus sought a “fair and transparent†process while awarding contracts to firms, including Mehli’s, as these would have been deemed related-party transactions. This, the report said upset Mehli, who allegedly led Ratan Tata to believe that Cyrus was working against him. These allegations have since been refuted by the Tatas.
But did Mehli also acquire a significant stake in Tata Power recently?
Yes. On 30 December, ET reported that Mehli had picked up a 2.57% stake in Tata Power, which was valued at about Rs 200 crore. The report said that the stake buy was in a bid to counter Cyrus, who has been at loggerheads with the Tatas ever since his ouster first as the chairman of Tata Sons and subsequently resignations from the boards of listed group companies including Tata Power itself. The stake purchase become especially interesting in the wake of the fact that Cyrus has approached the National Company Law Tribunal alleging that Mehli’s company was awarded contracts by Tata Power because of his proximity to Ratan Tata.
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