MUMBAI– The board of Tata Trusts is expected to meet Friday following government intervention aimed at easing tensions within the powerful philanthropic body that indirectly controls the Tata Group. The meeting comes just two days after officials reportedly brokered discussions between representatives of Tata Trusts and Tata Sons Private Ltd., urging both sides to reconcile their differences and prevent any disruption to the group’s broader operations.
The dispute reportedly began when some trustees removed former Defence Secretary Vijay Singh as a nominee director from the Tata Sons board and sought to oust another director, Venu Srinivasan—both considered close to Noel Tata, the current chairman of Tata Trusts.
Holding a 66 percent stake in Tata Sons, Tata Trusts wields significant influence over the $365 billion conglomerate, including the authority to appoint one-third of Tata Sons’ board members and veto major strategic decisions. This power structure has now become the focal point of the ongoing conflict.
A key flashpoint in the feud is the potential public listing of Tata Sons. The Reserve Bank of India (RBI) had earlier designated Tata Sons as an “upper-layer” nonbank financial company—a classification that mandates eventual listing. However, some trustees reportedly fear that going public could dilute Tata Trusts’ control, expose the group to hostile takeovers, and subject it to more stringent governance norms.
Adding to the friction are concerns that “majority of minority” voting provisions might expand the influence of the Shapoorji Pallonji (SP) Group, which owns an 18.37 percent stake in Tata Sons. Such a shift could weaken Tata Trusts’ dominance over board decisions and empower minority shareholders and public investors.
While a final decision on the matter remains pending, reports suggest that Tata Sons is awaiting new RBI guidelines expected by year-end, which could potentially exempt it from mandatory listing requirements.
In the meantime, Tata Sons Chairman Natarajan Chandrasekaran has reportedly been asked by the trustees to open negotiations with the SP Group for an amicable exit. The SP Group, struggling under heavy debt, has been exploring ways to divest its stake, including the possibility of Tata Sons buying back part or all of its shares. Proceeds from any sale would likely be used to reduce leverage within the group’s infrastructure arm and strengthen its balance sheet. (Source: IANS)
