The directors of Tata Trusts are likely to meet on Friday following government intervention to ease tensions in an ongoing boardroom dispute. Officials urged Tata Trusts and Tata Sons Private to resolve differences and ensure the group’s operations remain unaffected.
The disagreement began after some trustees removed former Defence Secretary Vijay Singh as a nominee director and attempted to remove Venu Srinivasan, both allies of Noel Tata, chairman of Tata Trusts. Tata Trusts holds a 66% stake in Tata Sons, giving it the power to appoint a third of board members and veto key decisions.
A major issue dividing the board is the potential listing of Tata Sons. The Reserve Bank of India previously classified Tata Sons as an “upper-layer” nonbank financial company, requiring a public listing. Some trustees fear an IPO could weaken their veto power and give the Shapoorji Pallonji (SP) Group, which holds 18.37%, greater influence.
Tata Sons expects RBI guidelines by year-end, which may exempt the company from a mandatory listing. Meanwhile, Chairman Natarajan Chandrasekaran has been asked to negotiate with the SP Group for a peaceful stake sale. Proceeds could help the SP Group reduce debt and strengthen its balance sheet.
