Tata Trusts Board likely to meet today amid internal feuds

Mumbai, Oct 10 The directors of Tata Trusts likely to meet on Friday after the government intervened this week to ease tensions in an ongoing boardroom dispute at the powerful philanthropic body that indirectly controls the Tata Group, according to reports.

The meeting comes after a government-mediated discussion held on Wednesday, where officials reportedly urged representatives of Tata Trusts and Tata Sons Private -- the holding company of the Tata Group -- to resolve their differences and ensure the group’s operations remain unaffected.

The disagreement reportedly began after some trustees removed former Defence Secretary Vijay Singh as a nominee director from the Tata Sons board and attempted to remove another director, Venu Srinivasan.

Both are said to be close to Noel Tata, who currently serves as the chairman of Tata Trusts.

Tata Trusts holds a 66 per cent stake in Tata Sons, giving it the authority to appoint a third of the company’s board members and veto key decisions.

This power structure gives the Trusts a decisive say in strategic matters -- and has become the focal point of the current power struggle.

Reports suggest that one major issue dividing the board is the potential listing of Tata Sons.

The Reserve Bank of India had earlier classified Tata Sons as an “upper-layer” nonbank financial company, a designation that requires it to go public.

Some trustees fear that an initial public offering (IPO) could weaken their veto power and expose the company to takeover risks and stricter governance rules.

There are also concerns that “majority of minority” voting provisions could give the Shapoorji Pallonji (SP) Group -- which holds an 18.37 per cent stake -- greater influence.

This could shift power away from Tata Trusts to Tata Sons’ board and public investors, according to reports.

However, the issue is unlikely to reach a conclusion soon. Tata Sons reportedly expects new guidelines from the Reserve Bank of India by the end of the year, which could exempt the company from the mandatory public listing requirement.

Meanwhile, Tata Sons Chairman Natarajan Chandrasekaran has been asked by the trustees to begin talks with the Shapoorji Pallonji Group for a peaceful exit from the holding firm.

The SP Group has been looking to sell its stake to reduce debt, but has faced difficulties finding a buyer.

Reports indicate that the SP Group is exploring several options, including Tata Sons purchasing part or all of its shares.

The group plans to use the proceeds from any potential sale to repay debt held by its infrastructure arm, helping it cut borrowing costs and strengthen its balance sheet.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor