Tata group's Noel Tata, Chandrasekaran meet Amit Shah, Nirmala Sitharaman. Here's why

Bengaluru: Tata Trusts chair Noel Tata, accompanied by two trustees and Tata Sons chair Natarajan Chandrasekaran, met home minister Amit Shah and finance minister Nirmala Sitharaman in New Delhi on Tuesday, Press Trust of India reported.

Tata, along with trustees TVS Motor Corp. chairman emeritus Venu Srinivasan and Mumbai-based lawyer Darius Khambata, met the top ministers at Shah’s residence, the report said. Mint could not ascertain the nature of the meeting, which comes at a time of growing divisions at Tata Trusts.

On Monday, The Economic Times reported that the government is stepping in to ease the turbulence, amid concerns that it could hurt the functioning of Tata Sons. Tata Trusts owns 65.9% in Tata Sons, the holding company of the Tata Group, India’s largest conglomerate.

An email sent to Tata Sons seeking a comment went unanswered.

Power struggle in Tata Trusts

On 24 September, Mint reported on the festering discontent at Tata Trusts, with seven trustees split into two opposing camps—Tata, Srinivasan and Vijay Singh in one, and Khambata, Pramit Jhaveri, Mehli Mistry and Jehangir H.C. Jehangir in the other.

The latter camp believes it is not being kept in the loop regarding important decisions concerning Tata Sons, and that a rule mandating approval by all trustees regarding Tata Group companies’ transactions above ₹100 crore is ignored.

The widening rift led to the ouster of Singh as the Trusts’ nominee on the Tata Sons board, Mint reported. Singh continues as a trustee at Tata Trusts.

The discord at Tata Trusts comes at a critical time for Tata Sons, which is trying to avoid a stock market listing, and negotiate an exit for the SP Group, which owns 18.38% in the company.

The differences could lead to a stalemate in the appointment of independent directors to the Tata Sons board, which currently has only six board members. For a conglomerate spanning salt to aviation and semiconductors, it needs representatives on the board of the operating entity. For all this, the trustees must act in unison and reach a consensus, according to the Trusts’ bylaws.

Tata Sons, along with several other large companies, was mandated to go public by 30 September, under a Reserve Bank of India (RBI) rule for non-banking finance companies. Last week, RBI governor Sanjay Malhotra, when asked about the status of Tata Sons missing the deadline, made a comment that left the matter open to interpretation.

“Any entity which has a registration, till it is not cancelled, will continue to do its business,” Malhotra said, making lawyers, including H.P. Ranina, conclude that the central bank appears to be still weighing its decision.

Earlier on Monday, Tata appeared at a Tata Sons event along with Chandrasekaran. The two sat together at the two-and-a-half-hour event, which saw Tata Sons chair Chandrasekaran acknowledge the efforts of Tata Group companies.