Tata Trusts Clash With Tata Sons Over RBI Talks And Public Listing

Internal concerns have emerged within the Tata group regarding whether the Tata Trusts were kept adequately informed during years of discussions with the Reserve Bank of India over the company's regulatory status.

What Happened

Sources familiar with the matter report that the Tata Trusts, which hold about 66 per cent of Tata Sons, did not receive proper updates on submissions made to the central bank, hearings held, or the options considered during the process. Tata Sons had sought to surrender its registration as a Core Investment Company to avoid a public listing, following its September 2022 classification as an upper-layer non-banking financial company by the RBI. On September 12, the RBI rejected this application and directed the company to comply with regulatory requirements, pushing Tata Sons toward a stock market listing.

Boardroom Tensions

Following the RBI's rejection, the Tata Sons board decided on September 17 to proceed with the listing and extended N Chandrasekaran's tenure as executive chairman for five years. This meeting brought internal differences into public view. Tata Trusts chairman Noel Tata opposed Chandrasekaran's reappointment, while nominee Venu Srinivasan supported it. The Trusts have since challenged the validity of the board's decision, questioning the use of a casting vote and the lack of exploration for alternatives. The Trusts also raised concerns over Srinivasan's public support for the listing while the deregistration application was still pending, arguing that the Articles of Association require affirmative votes from both Trust-nominated directors.