MUMBAI: A public interest litigation (PIL) has alleged that Nusli Wadia, chairman of the Bombay Dyeing Group, misappropriated an 8.69 per cent Tata Sons shares previously owned by FE Dinshaw Ltd, and fraudulently transferred it to the Shapoorji Pallonji Group during the 1970s.
This stake, acquired by FE Dinshaw Ltd in the 1920s after the non-repayment of a Rs2 crore loan by Tata Sons, forms the crux of the legal contention.
The PIL, filed by Pankaj Phadnis, founder of the Mumbai-based think tank Abhinav Bharat Congress, claims that Wadia executed this transfer soon after being appointed administrator of the Indian trust that held the stake.
The trust, registered in New York and established by Edulji Dinshaw, son of industrialist FE Dinshaw, willed all its assets, including the Tata Sons shares and over 1,000 acres of land in Malad, Mumbai, to two New York-based charities.
Fraudulent documents?
The petitioner contends that Wadia falsely claimed ownership of the trust’s Indian assets through an agreement dated August 1, 2003.
The PIL argues this agreement is fraudulent, as one of the trust’s primary beneficiaries, Bachoobai Woronzow (daughter of FE Dinshaw), was critically ill in a New York hospital at the time and passed away on August 12, 2003.
It is further alleged that Wadia forged three key documents to gain control over the Dinshaw Trust’s assets, including its significant Tata Sons stake. The Economic Offenses Wing (EOW) of the Mumbai Police, under the supervision of the Bombay High Court, has reportedly found prima facie evidence of forgery in its ongoing investigation.
Value of the deal
Although the PIL could not ascertain the exact value of the share transaction, it emphasises that the stake could be worth approximately $14 billion (Rs1.2 lakh crore) today, given Tata Group’s current valuation of over $150 billion.
The petition calls for the Serious Fraud Investigation Office (SFIO) to probe the circumstances under which the Dinshaw Trust’s stake in FE Dinshaw Ltd was allegedly transferred to the Shapoorji Pallonji Group and the consideration involved in this transaction.
Evolution of FE Dinshaw Ltd
FE Dinshaw Ltd, which held the 8.69 per cent Tata Sons stake, was renamed Cyrus Investments in 2008. It now serves as the primary investment vehicle for the Shapoorji Pallonji Group, originally a construction contractor that secured significant contracts from FE Dinshaw Ltd.
In addition to the alleged misappropriation of Tata Sons shares, the PIL accuses Wadia of fraudulent appropriation of approximately 3 crore square feet of saleable land being developed by the Raheja Group on property that belonged to the Dinshaw Trust.
The PIL calls for a thorough investigation into the alleged fraudulent transfer of both shares and land assets and seeks accountability for the alleged misuse of power and manipulation of trust documents.
The matter has raised serious questions about the administration of the Dinshaw Trust and the ultimate fate of its vast holdings.
