Mumbai: New Delhi is stepping in to ease the turbulence building up at a critical Mumbai institution, amid mounting concerns that infighting at majority shareholder Tata Trusts could begin to impede the functioning of Tata Sons, India's most valuable business conglomerate.
This week, two senior cabinet ministers will meet with four key officials of Tata group in the National Capital to discuss recent developments that have sparked concern.
Tata Trusts chairman Noel Tata, vice-chairman Venu Srinivasan, Tata Sons chairman N Chandrasekaran and Tata Trusts trustee Darius Khambata are the officials who will take part in the meeting early this week.
Public charitable trusts under the Tata Trusts umbrella control Tata Sons, the holding company of the 157-year-old, $180-billion, salt-to-semiconductors group.
The meeting has two principal agendas, multiple people familiar with the development said.
One is to discuss ways to ensure the divisions among the trustees of Tata Trusts, the majority shareholder of the group, get contained and don't impact the functioning of Tata Sons and the companies under it. Second is to discuss the way forward on the question of a public listing of Tata Sons, required under a regulation the Reserve Bank of India brought in three years ago.
ET first reported on the contentious September 11 meeting of the Tata Trusts, bringing into the public domain deep divisions that have developed among trustees about a year after the death of long-serving group patriarch Ratan Tata.
The trustees stand divided over a key lever of control the Trusts have over Tata Sons.
This is the appointment of nominee directors to the board of Tata Sons and how much information on board deliberations is shared with the rest of the trustees.
But what has sparked wider concern is the manner in which Vijay Singh, a former defence secretary, was ousted as a Tata Sons nominee director. The disruptive conduct of one trustee, in particular, has now come under wider scrutiny.
ET reported on September 12 that Venu Srinivasan and Noel Tata opposed the ouster of Singh as well as the proposal to appoint Mehli Mistry, another trustee, to the board. Mistry's appointment was supported by trustees Pramit Jhaveri, Darius Khambatta and Jehangir Jehangir.
It's unclear if the position of the trustees has changed since the meeting. A Tata Trusts meeting is now due on October 10.
An email by one of the trustees to the others, which is being seen as a veiled threat to remove Venu Srinivasan from Tata Sons board during an upcoming meeting in a manner similar to Singh, has also escalated hostilities. "This is being seen as a move to hijack Tata Sons and wrest control, thereby affecting the entire operations of the conglomerate," one official familiar with the developments said.
ET has reviewed a copy of this email. It is understood that in their deliberations in New Delhi, the officials are likely to push for a solution that allows for smooth conduct of Trusts' affairs.
Tata officials who are set to be part of the meeting did not respond to email queries requesting comment.
The turbulence at the Trusts has become a talking point among group executives and other stakeholders. The company has a number of board positions to fill, for instance. It's difficult to proceed with the board restructuring before the Trusts make a decision on nominee directors.
The timing of the meeting also coincides with a crucial regulatory deadline for Tata Sons. September 30 marked three years since the Reserve Bank of India notified it as an 'upper layer' shadow bank, or non-banking financial company, mandated to list within three years.
In March 2024, Tata Sons applied to RBI to deregister itself as an NBFC, seeking exemption from the listing requirement and the regulatory framework that comes with it. The regulator is yet to respond.
Shapoorji Pallonji Group, which holds an 18.37% stake in Tata Sons even as it's been struggling to manage its debt, has been pushing for a listing to unlock liquidity.
Officials said the government is particularly concerned after being apprised that some trustees have been demanding access to board agendas and minutes, wanting that key decisions be made with their prior approval, and questioning the appointment of independent directors. "A trustee has also been witch-hunting Tata Sons board members on important decisions taken around some group companies," one official said.
The disquiet within Tata Trusts has been simmering for months, insiders said, with sharp divisions surfacing as terms of key trustee are coming up for renewal. The process of term extensions, which requires unanimity, may prove contentious amid charges of conflict of interest, questions over slack financial disclosures by some trustees, and a number of other issues.
This week, two senior cabinet ministers will meet with four key officials of Tata group in the National Capital to discuss recent developments that have sparked concern.
Tata Trusts chairman Noel Tata, vice-chairman Venu Srinivasan, Tata Sons chairman N Chandrasekaran and Tata Trusts trustee Darius Khambata are the officials who will take part in the meeting early this week.
Public charitable trusts under the Tata Trusts umbrella control Tata Sons, the holding company of the 157-year-old, $180-billion, salt-to-semiconductors group.
The meeting has two principal agendas, multiple people familiar with the development said.
One is to discuss ways to ensure the divisions among the trustees of Tata Trusts, the majority shareholder of the group, get contained and don't impact the functioning of Tata Sons and the companies under it. Second is to discuss the way forward on the question of a public listing of Tata Sons, required under a regulation the Reserve Bank of India brought in three years ago.
ET first reported on the contentious September 11 meeting of the Tata Trusts, bringing into the public domain deep divisions that have developed among trustees about a year after the death of long-serving group patriarch Ratan Tata.
The trustees stand divided over a key lever of control the Trusts have over Tata Sons.
This is the appointment of nominee directors to the board of Tata Sons and how much information on board deliberations is shared with the rest of the trustees.
But what has sparked wider concern is the manner in which Vijay Singh, a former defence secretary, was ousted as a Tata Sons nominee director. The disruptive conduct of one trustee, in particular, has now come under wider scrutiny.
ET reported on September 12 that Venu Srinivasan and Noel Tata opposed the ouster of Singh as well as the proposal to appoint Mehli Mistry, another trustee, to the board. Mistry's appointment was supported by trustees Pramit Jhaveri, Darius Khambatta and Jehangir Jehangir.
It's unclear if the position of the trustees has changed since the meeting. A Tata Trusts meeting is now due on October 10.
An email by one of the trustees to the others, which is being seen as a veiled threat to remove Venu Srinivasan from Tata Sons board during an upcoming meeting in a manner similar to Singh, has also escalated hostilities. "This is being seen as a move to hijack Tata Sons and wrest control, thereby affecting the entire operations of the conglomerate," one official familiar with the developments said.
ET has reviewed a copy of this email. It is understood that in their deliberations in New Delhi, the officials are likely to push for a solution that allows for smooth conduct of Trusts' affairs.
Tata officials who are set to be part of the meeting did not respond to email queries requesting comment.
The turbulence at the Trusts has become a talking point among group executives and other stakeholders. The company has a number of board positions to fill, for instance. It's difficult to proceed with the board restructuring before the Trusts make a decision on nominee directors.
The timing of the meeting also coincides with a crucial regulatory deadline for Tata Sons. September 30 marked three years since the Reserve Bank of India notified it as an 'upper layer' shadow bank, or non-banking financial company, mandated to list within three years.
In March 2024, Tata Sons applied to RBI to deregister itself as an NBFC, seeking exemption from the listing requirement and the regulatory framework that comes with it. The regulator is yet to respond.
Shapoorji Pallonji Group, which holds an 18.37% stake in Tata Sons even as it's been struggling to manage its debt, has been pushing for a listing to unlock liquidity.
Officials said the government is particularly concerned after being apprised that some trustees have been demanding access to board agendas and minutes, wanting that key decisions be made with their prior approval, and questioning the appointment of independent directors. "A trustee has also been witch-hunting Tata Sons board members on important decisions taken around some group companies," one official said.
The disquiet within Tata Trusts has been simmering for months, insiders said, with sharp divisions surfacing as terms of key trustee are coming up for renewal. The process of term extensions, which requires unanimity, may prove contentious amid charges of conflict of interest, questions over slack financial disclosures by some trustees, and a number of other issues.
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