Noel Tata sent a letter to Tata Sons requesting consideration of a business reorganization plan he presented to avoid the public listing of the holding company. Furthermore, he raised the issue of a partial exit by the Shapoorji Pallonji group to raise ₹25,000 crore at the next board meeting scheduled for November 26.
According to sources close to the matter, Noel, who heads Tata Trusts, sent two separate letters to Suprakash Mukhopadhyay, Secretary of Tata Sons and a board member. It was noted that any member has the right to put an item on the agenda with 15 days' notice.
The first letter asks for a discussion and vote on the reorganization plan. Under this plan, Tata Electronic Systems and Tata Consulting Engineers will be merged into Tata Sons Private Limited. This structure could help prevent the listing of the holding group, which the Reserve Bank of India (RBI) views as a capital investment company rather than an operating one.
In the letter, Noel also requests a discussion of the RBI's letter dated September 11, which makes the listing of Tata Sons mandatory by rejecting the delisting application. He informs that after this letter, the two largest trusts under Tata Trusts submitted this reorganization proposal on September 26.
Under the proposed plan, Tata Sons would become an operating company through the merger of electronic and engineering divisions, thereby ending its status as an NBFC-CIC, which is what triggers the regulator's listing requirement.
The issue of Tata Sons' listing is central to the disagreements between Noel and the Tata Sons board of directors. The board voted against the position of the head of the largest ownership group, supporting compliance with the RBI's mandate at its meeting on September 17.
Noel's side insists on maintaining the character of this more than 150-year-old group, arguing that private status allows it to avoid pressure from demanding investors and facilitates long-term decision-making. However, Tata Sons management states that it is compelled to follow regulatory requirements.
If the reorganization plan is accepted by Tata Sons, the merger proposal will require approval from the RBI, the National Company Law Tribunal, and the Ministry of Corporate Affairs of the Central Government.
Both letters from Noel's side arrived at the end of a very tense week. This week began with reconciliation talks between Noel and Tata Sons Chairman N. Chandrasekaran at the latter's residence in South Mumbai on Sunday. This was followed by a letter from Noel to Tata Sons on Monday, challenging Chandrasekaran's reappointment as chairman. The situation took a political turn when opposition leader Rahul Gandhi sharply criticized the government for interfering in the matter.
In the second letter, Noel requests information from Tata Sons management regarding the progress of the SP Group's letter concerning the partial divestment of its assets to raise ₹25,000 crore. He asked for details of the valuation of this proposal and attached a draft resolution.