Board of Directors of Tata Sons Pvt. Ltd. will meet on Thursday to discuss how to handle the Reserve Bank of India-sanctioned listing, including whether outgoing chairman Natarajan Chandrasekaran should be asked to remain in his post.
A discussion of the nominating and compensation committee’s recommendations was added to the meeting agenda at the last minute, according to people familiar with the matter. The so-called NRC is expected to recommend that Chandrasekaran reconsider his decision to step down, the people said, asking not to be identified discussing internal matters.
The Reserve Bank of India’s refusal to relax listing rules for Tata Sons has turned what should have been a routine board meeting into a high-stakes discussion about the way forward.
Chandra, as he is commonly known, said last month that he plans to step down when his term ends in February, forcing the group to prepare for a leadership change. His planned exit follows months of disagreement with Tata Trusts Chairman Noel Tata over the listing and allocation of capital in the sprawling conglomerate.
A Tata Sons spokesman did not respond to a request for comment.
Tata Sons had sought an exemption from listing requirements to avoid tighter regulatory scrutiny and increased public disclosure. A public offering would force the holding company to reveal far more information about the finances and management of the group’s sprawling businesses – from steel and cars to software, airlines and consumer goods – and could weaken the influence of the Tata Trusts, the group of philanthropies that control the company.
The Tata group values its current ownership structure, arguing that it allows the company to value its portfolio over the long term without pressure from the public market. The $185 billion group controls more than two dozen listed companies and also plays a key role in India’s high-tech ambitions, committing to producing the first domestic semiconductor chips.
While rejecting Tata Sons’ plea for delisting, the RBI has also filed a petition in the Bombay High Court to ensure that its position is heard before any order is passed if the Tata Sons seek legal assistance.
The RBI’s mandate for a public offering follows long-standing demands from the debt-ridden Shapoorji Pallonji Group, Tata Sons’ largest minority shareholder, which has been pushing for the listing to profit from its 18.4% stake.