Business & Finance
Tata Trusts Consider RBI Review Before Legal Action on Public Listing
Tata Trusts are encouraging Tata Sons to explore all available options, including requesting the Reserve Bank of India (RBI) to reconsider and clarify its directive for Tata Sons to go public, prior to pursuing legal action. This development follows the RBI's filing of a caveat in the Bombay High Court on Monday, aiming to ensure its position is heard before any judicial order concerning Tata Sons' public listing. The RBI's action suggests a potential legal dispute between the central bank and the conglomerate.
The RBI's decision to file the caveat comes after its rejection on Saturday of Tata Sons' request to surrender its registration, a move that would necessitate a public share sale. Tata Trusts Chairman Noel Tata and most trustees prefer to keep Tata Sons private. A Tata Group executive indicated that while the legal route is considered an option, Tata Trusts first wants Tata Sons to seek clarification from the RBI regarding its decision and the rejection of its plea. These matters are expected to be discussed at Tata Sons' board meeting on September 17. This meeting will be the first since N. Chandrasekaran announced on August 12 that he would not seek a third term as head of the conglomerate.
There are differing views among trustees regarding support for the public listing. Two trustees, Venu Srinivasan and retired defense secretary Vijay Singh, have reportedly shifted their stance and now support the listing of Tata Sons. Singh was removed from the Tata Sons board in September of the previous year, while Srinivasan is one of the two nominees from the Trusts. The Tata Sons board includes Chandrasekaran, Noel Tata, Srinivasan, group CFO Saurabh Agrawal, and independent directors Harish Manwani and Anita Marangoly George.
Noel Tata's opponents have filed complaints, with Singh previously filing a complaint against a smaller Tata trust linked to Sir Ratan Tata Trusts (SRTT), alleging wrongdoing. Srinivasan also complained that the number of permanent members at SRTT violates rules. These complaints led the Maharashtra charity commissioner to prevent SRTT from holding board meetings or making official decisions. Former trustee Mehli Mistry has also filed multiple challenges against Tata Trusts.