Phantom of Bombay House leaves a peerless legacy
2 min read 29 Jun 2022, 12:15 AM ISTPallonji Mistry’s final years were marked by intense limelight that he had shunned all his life
PremiumPallonji Mistry, the patriarch of the Shapoorji Pallonji (SP) group, who passed away at 93 years early Tuesday, leaves behind a legacy that will remain unmatched.
For someone with a net worth of more than $29 billion that included his family’s 18.37% stake in Tata Sons, the holding company of the diversified Tata group, Mistry lived a rather low profile life. So much so that very few have heard him publicly ever, earning him the sobriquet of Phantom of Bombay House, the headquarters of the Tata group in south Mumbai. Despite the immense clout he held in Tata, Mistry played a passive role, reserving his counsel only for rare occasions.
Things changed dramatically when his younger son Cyrus was chosen as the Tata Sons chairman following the retirement of Ratan Tata in December 2012. According to old timers in Tata group, Pallonji Mistry was reluctant to let his son take up the role and relented only after much persuasion by friends and well wishers. His primary concern stemmed from the fact that his family, despite the close family and business relations with the Tatas, had not played an active role in the group’s affairs.
Pallonji Mistry’s misgivings were proven true with the unceremonious ouster of Cyrus Mistry as Tata Sons chairman following differences with Ratan Tata. Cyrus, it appears now, had perhaps wrongly assumed that the final call on Tata group matters rested with him.
Pallonji Mistry’s final years were coloured by the immense public scrutiny and limelight that he had shunned his entire life. The acrimonious courtroom battle that followed Cyrus Mistry’s removal saw trading of charges and much maligning of each other’s reputation. The Mistry family ultimately lost the courtroom battle, with the Supreme Court ruling in favour of the Tata group.
Pallonji, who had joined the SP group in 1947, taking the reins from his father Shapoorji, had led the company’s expansion into the Middle East, including Abu Dhabi, Qatar, and Dubai, in 1970. It had won a contract to build the Sultan of Oman’s palace in 1971 and many ministerial buildings. Mistry took a backseat after Shapoor, his eldest son, took over as chairman of the SP Group companies in 2004.
In the last two decades, the SP group has ventured into several new businesses, including renewable energy, ports, and real estate. However, the recent years have not been easy for the group and it has seen its debt balloon to unsettling proportions, finally leading to a default on repayment obligations for the first time in its history, prompting it to look for ways to raise more capital. The group zeroed on its prized jewel, its stake in Tata Sons valued at around ₹90,000 crore. However, its efforts to sell the stake in full or in parts were stalled by the Tatas, thus leaving the SP group with very little space for financial manoeuvring.
Out of options, the group took recourse to loan restructuring for the first time. It was forced to raise funds by selling large stakes in group firms that included its consumer appliances business Eureka Forbes to private equity investors.
