tata sons ratan tata cyrus mistry removal reasons trusts withdrawal from crps shares investment differences with  over
Tata Sons Chairman Ratan Tata (C) arrives in his office after attending a meeting at the company's head office in Mumbai, India, October 25, 2016.Reuters

Two trusts controlled by Ratan Tata withdrew their investments from Tata Sons as early as May this year, apparently an indication that all was not well with Cyrus Mistry's leadership of the holding company. The investments were valued at about Rs 4,000 crore and held in the form of 39.5 million preference shares. 

Much before the pre-determined redemption date of the cumulative redeemable preference shares (CRPS), Jamsetji Tata Trust and Navajbhai Ratan Tata Trust redeemed their shares worth Rs 3,951 crore, according to the Business Standard.

The investors (Trusts) were entitled to redemption of their investments before the due date if there was a disagreement on the dividend rate, according to the terms of investment. The shares accounted for approximately 90 percent of the paid-up share capital of Tata Sons of Rs 4,255 crore as of March 31, 2016, the daily said.

Incidentally, the redemption by the Ratan Tata-controlled trusts came when the holding company (Tata Sons) was embroiled with Japanese telecom company Docomo in a $1.17 billion dispute.

"Pursuant to the requests received from the trusts, the holders of the entire series of 39515000 – 8.25 percent Cumulative Redeemable Preference Shares (CRPS), the board approved the redemption of the said CRPS and the same were redeemed and paid on May 25, 2016, along with pro rata dividend for the period up to May 25, 2016," the director's report of Tata Sons said, according to the daily.

Tata Sons is the promoter of the major operating Tata companies and holds significant shareholdings in these companies; about 66 percent of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family.