Phantom of Bombay House leaves an unparalleled legacy

Pallonji Mistry, the patriarch of the Shapoorji Pallonji (SP) group, who died on Tuesday at the age of 93, leaves behind a legacy that will remain unmatched.

For someone with a net worth of over $29 billion that included her family’s 18.37% stake in Tata Sons, the holding company of the diversified Tata Group, Mistry has lived a rather low-key life. So much so that very few have heard of it publicly, earning it the nickname Phantom of Bombay House, the headquarters of the Tata Group in South Mumbai. Despite the immense influence he held at Tata, Mistry played a passive role, reserving his advice only on rare occasions.

Things changed drastically when his youngest son Cyrus was chosen as chairman of Tata Sons after Ratan Tata retired in December 2012. According to Tata Group alumni, Pallonji Mistry was reluctant to let his son take on the role and gave in only after a long time. persuasion by friends and supporters. His main concern stemmed from the fact that his family, despite the close family and business relations with the Tatas, had not taken an active role in the affairs of the group.

Pallonji Mistry’s fears proved true with the unceremonious ousting of Cyrus Mistry as chairman of Tata Sons following disputes with Ratan Tata. Cyrus, it now seems, may have mistakenly assumed that the final decision regarding the affairs of the Tata Group was his.

Pallonji Mistry’s later years were colored by the immense public scrutiny and spotlight he had avoided all his life. The acrimonious battle in the courtroom that followed Cyrus Mistry’s dismissal saw the exchange of accusations and much slander of each other’s reputations. The Mistry family ultimately lost the battle in the courtroom, with the Supreme Court ruling in favor of the Tata Group.

Pallonji, who joined the SP Group in 1947, taking the reins from her father Shapoorji, led the company’s expansion into the Middle East, including Abu Dhabi, Qatar and Dubai, in 1970. She won a contract for the construction of the Sultan of Oman’s palace in 1971 and many ministerial buildings. Mistry took a back seat after Shapoor, her eldest son, took over as chairman of the SP Group companies in 2004.

Over the past two decades, the SP Group has ventured into several new businesses, including renewable energy, ports and real estate. However, the past few years have not been easy for the group and it has seen its debt swell to worrying proportions, eventually leading to default on repayment for the first time in its history, prompting it to look for ways to raise more capital. The group focused on its prized gem, its stake in Tata Sons valued at around 90,000 crores. However, its efforts to sell the stake in whole or in part were blocked by the Tatas, leaving the SP Group with very little room for financial manoeuvring.

Short of options, the group resorted for the first time to the restructuring of loans. He was forced to raise money by selling large stakes in group companies, including his home appliance business Eureka Forbes, to private equity investors.

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