According to a new report, Tata Sons had begun examining provisions governing board appointments, independent directors and shareholder rights to align them with SEBI’s listing framework.
The review remains preliminary, and no final amendments have been approved, according to an ET exclusive. Tata Sons did not yet comment to the newspaper, it stated.
Tata Trusts, which collectively hold approximately 66 per cent of Tata Sons, have publicly opposed listing. In September, the trust has stated: “The Tata Trusts have not agreed to listing of Tata Sons.” It added that the board had agreed to explore all available options and consider the findings at a separate meeting.
Tata Trusts even went on to propose an alternative. On September 28, they proposed merging Tata Electronics Systems Solutions and Tata Consulting Engineers into Tata Sons, arguing that operating revenues and the resulting asset mix would take the combined entity outside the NBFC and core investment company definitions.
As per the ET report, Articles 104B and 121 underpin the Trusts’ nomination and affirmative-voting rights. A listing would not automatically remove their majority ownership, but could change the conditions under which special governance rights continue.
SEBI Regulation 31B requires special shareholder rights to receive approval through a special resolution once every five years. Any additional voting restriction would require examination of the applicable provisions and transaction structure.
Leadership succession is a separate dispute
In its September 17 statement, the Trusts called the resolution to reappoint N. Chandrasekaran chairman a “legal nullity”, citing nominee-director voting requirements.
Noel Tata’s accompanying statement cautioned against conflating the issues: “They are not, however, of the same kind, and they do not answer one another.”
