The Tata Trusts on Monday announced a strategic reorganisation plan for the Tata Sons Private Limited (TSPL), which is aimed at ensuring that the reorganised entity would neither be a ‘Non-Banking Financial Company’ (NBFC) nor a ‘Core Investment Company’ (CIC).
The proposed reorganisation would lead to the merger of Tata Electronics Systems Solutions Private Limited (TESS) and Tata Consulting Engineers (TCE) with TSPL, the Tata Sons said in a press release on Monday.
“The proposed strategic reorganisation of the business and operations of TSPL is not a new pathway,” it read.
Tata Trusts chairman Noel Tata reportedly suggested a restructuring exercise previously too. He proposed splitting the company into multiple entities, at a board meeting on September 17, in a bid to prevent the listing of the Tata’s holding firm.
Tata Sons and Tata Trusts, which own 65.9% of Tata Sons, have developed major differences over the past few days. Noel Tata, who was strictly against listing the firm by revenue, informed the board that that he would block any such decision.
The conflict over listing erupted during the September 17 Tata board meeting. According to Noel Tata, the Tata Sons board, led by the late Ratan Tata, had “unanimously” agreed that the company would stay “unlisted”.
Another friction point was the board’s “unanimous” vote to re-appoint N Chandrasekaran as executive chairman of the group, a move Noel called a “legal nullity”. He also emerged as the only board member to have voted against the decision.