Kolkata: The warring captains of the Tata group — Tata Sons chairman N Chandrasekaran and Tata Trusts chairman Noel Tata secretly met last weekend to iron
out their differences, media reports stated. The meeting was organised by the group’s former veteran N A Soonawala who wanted to resolve the acrimony at the top of one of the largest business groups in India. According to a report in The Economic Times, the meeting did not prove to be fruitful. The key points of the discussion included the listing of the holding company, the proposal to buy Shapoorji Pallonji (SP) Group’s stake in Tata Sons and Chandrasekaran’s tenure as chairman.
No agreement could be reached
The meeting on October 25 ended with a mutual agreement to negotiate further, but the very next day, Noel Tata issued a letter questioning the decisions taken at the Tata Sons board meeting held on September 17. Tata raised questions on the process of approving Chandrasekaran’s re-appointment, voting rules and the possibility of conflict of interest. Noel Tata, in his letter dated October 26, sought recording of board meetings, final minutes (proceedings) and voting records.
The Sunday meeting was the first occasion when the two sat across a table since the board meeting on September 17, when Chandrasekaran was approved for another term much to the annoyance of Noel Tata. He is also opposed to the listing of Tata Sons. The report stated that veterans of the group such as S Ramadorai, Ishaat Hussain and R Gopalakrishnan along with Noel Tata’s wife Aloo Tata and Kirloskar Systems Chairperson and MD Gitanjali Kirloskar engineered the meeting. Incidentally, Aloo Tata is the sister of SP Group Chairman Shapoor Mistry and Noel Tata’s son Neville is married to Gitanjali Kirloskar’s daughter Mansi.
Where did the meeting take place?
The meeting was held at Noel Tata’s residence in South Mumbai. He said that Chandrasekaran expressed concern over the lack of dialogue between the two parties and said that the differences should be resolved by mutual consent. Noel Tata reiterated that Tata Sons should remain a private company. He suggested that a partial monetization of SP Group’s 18.4% stake could give them Rs 25,000 crore. It is said that Chandrasekaran replied that Tata Sons will consider it, but listing the company (listed in the stock market) will make matters more complicated.
Chandrasekaran’s stance on the listing of Tata Sons
Chandrasekaran reportedly stated that the decision to list is mandatory under RBI rules and it was not in his hands at all. Shapoor Mistry-led SP Group is supporting the listing on the grounds that transparency can increase and funds can be withdrawn from its investments. Tata Trusts, the majority stake holders in Tata Sons, are opposing the listing and say other options should be considered instead.
The RBI had rejected Tata Sons’ proposal to withdraw its registration as an ‘upper-layer non-banking financial company’ (NBFC). Noel Tata has proposed merging Tata Sons with other companies to avoid the NBFC tag.
Chandrasekharan’s concern about the big projects
Noel Tata also reportedly raised the issue of re-appointment of Chandrasekaran and said that according to the policy of the group, he should retire at the age of 65 years. The report stated that Chandrasekaran has indicated that he will follow the policy, but has also said that he has to complete the ongoing big projects at companies like Tata Electronics, Air India and Tata Digital.
