Mumbai: Noel Tata has written to Tata Sons to take up a business reorganisation plan presented by him to avert listing of the conglomerate’s holding company, and Shapoorji Pallonji group’s part-exit to raise Rs 25,000 crore at the next board meet scheduled for November 26.
Noel, who chairs Tata Trusts, has sent two separate letters to Tata Sons secretary Suprakash Mukhopadhyay in his capacity as a board member, sources privy to the development said, adding that any member can convey an item to be included in the agenda with 15-day notice.
Emails sent to both Noel Tata and Tata Sons for a response on the development did not elicit a reply immediately.
First of the letters asks for a discussion and a vote on the reorganisation plan, under which it plans to amalgamate Tata Electronic Systems and Tata Consulting Engineers into Tata Sons Private Limited that can help avoid listing the group’s holding company, which is considered by RBI as a core investment company and not an operational one.
Noel’s letter asks for a discussion on the September 11 letter from RBI, which makes a listing of Tata Sons mandatory by rejecting the application for de-registration. It informs that subsequent to the letter, two of the biggest trusts under Tata Trusts had sent the reorganisation proposal on September 26.
As per the proposal, Tata Sons will become an operating company with the merger of electronics and engineering businesses, and cease to be an NBFC-CIC, which attracts the regulator’s listing mandate.
The issue of Tata Sons’ listing is core to the differences between Noel and the board of Tata Sons, which outvoted the head of the biggest owner group in the company by favouring for a compliance with the RBI mandate at its meeting on September 17.
Noel’s side has been maintaining the need to preserve the character of the over-150-year grouping, advocating that the private character keeps investor pressure on delivering returns at bay and helps it take long term bets. The management of Tata Sons, however, says that it will have to follow the mandate of the regulator.
If the reorganisation plan gets adopted by Tata Sons, the amalgamation proposal will have to get nods from the RBI, National Companies Law Tribunal and also the Central government’s Ministry of Corporate Affairs.
The two letters from Noel’s side come at the end of a very hectic week, which started with truce talks between Noel and Tata Sons chairman N Chandrasekaran at the former’s South Mumbai residence on Sunday. This was followed by a letter from Noel to Tata Sons on Monday challenging Chandrasekaran’s reappointment as chairman, and the issue taking a political turn with Leader of Opposition Rahul Gandhi lambasting the government for interference in the matter.
In the second letter to Tata Sons, Noel seeks information from the Tata Sons management on the progress on the letter from SP Group involving part-exit of its holdings to raise Rs 25,000 crore. He has asked for details on how the proposal has been evaluated and has also presented a draft resolution in the annexure.
