Mumbai – On Friday, a key meeting is set between Tata Trusts’ directors after the Indian government stepped in this week to calm rising tensions in the philanthropic group that indirectly powers the Tata Group. The talks come after a government‑led discussion Wednesday, during which officials urged Tata Trusts and Tata Sons – the Tata Group’s holding company – to settle their disputes and keep day‑to‑day business running smoothly.
The conflict started when a group of trustees kicked out former Defence Secretary Vijay Singh from the Tata Sons board and tried to remove Venu Srinivasan, a close ally of Noel Tata, the current chairman of Tata Trusts. Because Tata Trusts owns 66 % of Tata Sons, they can appoint one‑third of the board and block major decisions, giving them heavy sway over the company’s future.
A hot‑button issue in the debate is whether Tata Sons should go public. The Reserve Bank of India has classified the company as an “upper‑layer” non‑bank financial company, a status that normally forces a public listing. Some trustees worry that an IPO would dilute their veto power, open the doors to takeover threats, and trigger stricter governance rules. They also fear that the “majority of minority” voting rule could let Shapoorji Pallonji (SP) Group, which holds 18.37 % of Tata Sons, gain more influence.
Unless the Reserve Bank changes its guidance, the move to list could be delayed. Tata Sons says it expects new rules by year‑end that might exempt the company from the mandatory listing requirement.
Meanwhile, the trustees have asked Natarajan Chandrasekaran, Tata Sons’ chairman, to negotiate a smooth exit for the SP Group from its stake. SP is trying to sell its shares to reduce debt but has struggled to find a buyer. The group is exploring options, including Tata Sons buying part or all of SP’s equity. Proceeds from any sale would help the SP Group pay down debt in its infrastructure arm, lower borrowing costs, and strengthen its balance sheet.
Source: ianslive
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