After Tata Trusts, which holds a 66% stake in Tata Sons Private Limited (TSPL), outlined a strategic reorganisation plan for the company that, if implemented,
would mean the reorganised entity would no longer be a 'Non-Banking Financial Company' (NBFC) or a 'Core Investment Company' (CIC), legal experts believe the tension between shareholder rights and board-level decision-making is at the heart of the Tata Sons dispute. Ketan Gaur, Partner at Trilegal told Times Now Digital, "from a corporate-law perspective, the proposal illustrates the tension between shareholder rights and board-level decision-making that now sits at the heart of the Tata Sons dispute. Tata Trusts, which holds approximately 66% of Tata Sons, can propose and seek approval for a corporate restructuring through the appropriate corporate processes, but the implementation of a regulated amalgamation cannot be achieved merely by shareholder preference. The Tata Sons board, the statutory approval process for the amalgamation and, critically, the RBI’s regulatory powers each have a distinct role. The fact that the restructuring may have certain consequence such as non-listing does not, by itself, make the restructuring impermissible; equally, the fact that it is legally permissible in principle does not mean that the RBI is bound to approve it." Tata Trusts states, "the proposed reorganisation of Tata Sons (TSPL) essentially entails the merger of ‘Tata Electronics Systems Solutions Private Limited’ (TESS) and ‘Tata Consulting Engineers ‘(TCE) with TSPL." Tata Sons had not issued a response to the Tata Trusts' restructuring proposal (at the time of filing this copy).
