Tata Sons listing: ‘Trusts not adequately briefed on RBI talks’

Tata Sons' ongoing discussions with the Reserve Bank of India (RBI) regarding its regulatory status have led to concerns about whether the Tata Trusts, the controlling shareholder, were kept adequately informed of the talks and options considered. Sources suggest that the Trusts were not updated on the submissions made to the RBI, hearings held with the regulator, or the overall course of the regulatory process.

The Trusts, which hold about 66% of Tata Sons, were not fully aware of the representations being made on the company's behalf and the alternatives being discussed with the regulator. Tata Sons sought to surrender its registration as a Core Investment Company (CIC), aiming to avoid a public listing. However, the RBI rejected Tata Sons' deregistration application in September 2023 and directed the company to comply with regulatory requirements, effectively putting the company back on the path to a stock market listing.

The Trusts oppose the listing and have urged Tata Sons to explore alternative options. The disagreement between Tata Sons and the Tata Trusts has emerged as the Trusts challenge the validity of the board's decision and question the use of casting votes. The issue now revolves around disclosure and shareholder consultation, with the central question being whether the Tata Trusts were adequately informed about the regulator talks, hearings, and alternatives considered.