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Tata Trusts propose Tata Sons rejig to move away from financial company status
The proposed reorganisation would lead to the merger of Tata Electronics Systems Solutions Private Limited and Tata Consulting Engineers with TSPL.
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The Tata Trusts on Monday announced a reorganisation plan for the Tata Sons Private Limited (TSPL) in its bid to prevent public listing of the company. The Trusts said the rejig was meant to ensure that the reorganised entity would neither be a Non-Banking Financial Company (NBFC) nor a Core Investment Company (CIC).
The proposed reorganisation would lead to the merger of Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE) with TSPL, the Tata Sons said in a press release on Monday. Such a move would mean the company would have its own operations and revenues.
Tata Sons and Tata Trusts, which own 65.9% of Tata Sons, have developed major differences over the issue of public listing. Noel Tata, who is strictly against listing the firm by revenue, has told the board that he would block any such move.
“The proposed strategic reorganisation of the business and operations of TSPL is not a new pathway,” the statement released on Monday read.
Tata Trusts chairman Noel Tata reportedly suggested a restructuring exercise previously. He proposed splitting the company into multiple entities, at a board meeting on September 17, in a bid to prevent the listing of the Tata's holding firm.
The conflict over listing erupted during the September 17 Tata board meeting. According to Noel Tata, the Tata Sons board, led by the late Ratan Tata, had “unanimously” agreed that the company would stay “unlisted”.
Another point of contention was the board's “unanimous” vote to re-appoint N Chandrasekaran as executive chairman of the group. Noel called the move a “legal nullity” while emerging as the only board member to have voted against the re-appointment.
