Tata Trusts opposes SP Group’s push to list Tata Sons publicly, it can buy out stakes by paying Rs 3,00,00,00,00,00,000
Tata vs SP Group: Tata Trusts rejects plan to list Tata Sons, warns it would weaken control and undermine inter-group decisions
Bombay House, Headquarters, Tata Sons. (File Image)
Tata Trusts has decided to oppose any move to take public holding company Tata Sons, which owns the majority stake in Tata Group companies. This decision was taken after SP Group moved the Reserve Bank of India demanding an IPO of Tata Son. Tata Trusts has said that if Tata Sons is listed, its right to vote on important issues within the group will be adversely affected. It would also be subject to listing regulations that could be restrictive, he said.
Tata Sons public listing
Earlier, Shapoorji Pallonji Group had requested the Reserve Bank of India for public listing of Tata Sons. This was a long-standing demand of the SP group as the value of their investment in Tata Sons would be unlocked. Tata giant’s largest minority shareholder said Tata Sons will also gain from the IPO as it will reduce the influence of Tata Trusts on the company.
Tata Group dispute
According to Securities and Exchange Board of India (SEBI) regulations, majority minority votes are required and majority shareholders are restricted from voting on certain resolutions. Going public would also weaken the special majority shareholder rights granted to Tata Trusts under the Tata Sons Articles of Association.
(Tata Trusts Chairman Noel Tata)
Shareholder of Tata Sons
Clause 75 of the Articles of Association allows Tata Trusts to acquire shares of the Shapoorji Pallonji group. The SP group accepted this provision in 1964 when it first purchased the shares. The Supreme Court upheld this provision in 2021. Tata Trusts holds 66% stake in Tata Sons, while Shapoorji Pallonji group holds 18.4% stake.
Tata Sons IPO
The SP group has accumulated debts of over Rs 52,000 billion. He wants a public listing so that his shares can be released and he can pay off his debts. Tata Sons has an option to buy shares of SP Group for around Rs 3 lakh crore. It could also buy a 6% stake, which would give SP Group enough money to pay off its debts.
