Tata group faces scrutiny over holding company listing
Tata Sons, the holding company of the $260 billion Tata conglomerate, must explore options to avoid listing after the Reserve Bank of India mandated it to go public. Tata Trusts, which owns 65% of Tata Sons, opposes a listing, fearing it would impair their majority shareholder rights. Noel Tata, Chair of Tata Trusts, requested a three-year extension from the RBI to comply with the listing mandate, citing the need to recast the company's articles of association and secure shareholder approvals.
(The author is a Reuters Breakingviews columnist. ) By Shritama Bose MUMBAI, Sept 21 (Reuters Breakingviews) — A forced IPO of its holding company points to creeping official control over the $260 bln chips-to-power group. The resulting boardroom battle is a test of regulatory and judicial independence and the outcome will establish new boundaries for private enterprise in the country. Follow Shritama Bose on LinkedIn and X.
Context News Tata Trusts Chair Noel Tata on September 17 said the Tata conglomerate must explore all options to avoid a listing of its holding company Tata Sons. "If Tata Sons is publicly listed, the rights of Tata Trusts as majority shareholders stand to be seriously impaired," he said at a Tata Sons board meeting, according to a statement from the Trusts which own 65% of Tata Sons. Noel asked the board to engage with the Reserve Bank of India and seek a period of at least three years up to September 2029 to comply with a regulatory mandate to go public. He said it would take time to recast Tata Sons' articles of association and secure related shareholder approvals.
The RBI on September 11 turned down Tata Sons' request to deregister as a non-bank lender, making it mandatory for the company to go public and comply with the central bank's rules for large shadow lenders. The regulator also took the unusual move of pre-emptively approaching the Bombay High Court, seeking to be heard in any case filed related to the listing of Tata Sons, Tata Sons on September 17 reappointed N. Chandrasekaran as executive chair for five years and said it would initiate steps to comply with the RBI's order. It reversed Chandrasekaran's decision on August 12 to not seek reappointment citing the absence of the board's unanimous support.
Tata Trusts, which oppose a listing, dismissed the re-appointment as "illegal". com)