Trustees of Tata Trusts have rebuffed objections from two senior trustees concerning a proposed restructuring of Tata Sons. They emphasized that the Reserve Bank of India has not required a listing for Tata Sons. Additionally, they asserted that the restructuring does not jeopardize the charitable status of the trusts. The trustees referenced past resolutions in support of preserving Tata Sons' unlisted status.
Mumbai: Tata Trusts chairman Noel Tata and trustees of the Sir Dorabji Tata Trust (SDTT) - Darius Khambata, Neville Tata and Bhaskar Bhat - have rejected objections by two senior trustees to a plan to restructure Tata Sons.
They said the Reserve Bank of India (RBI) had not mandated a listing of the group holding company and accused the dissenters - vice chairmen Venu Srinivasan and Vijay Singh - of undermining decisions taken by the trusts.
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The trustees said RBI had turned down the bid by Tata Sons to give up its core investment company registration but hadn't called for a listing. "The communication declined Tata Sons' application to surrender its registration," they said in an October 4 letter that ET has seen. "It does not mention listing, prescribe any particular step, or state that Tata Sons is in breach of anything."
They said the RBI communication instead made it imperative that an alternative be found. "What it does make urgent is to find a lawful course, other than listing, by which the settled objective of the Trusts and Tata Sons can be achieved," they said.
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The response came after Srinivasan and Singh said they had not been consulted before a September 28 letter to the Tata Sons board from Tata Trusts, putting forward a restructuring plan for the holding company.
Trusts Do Not Run Tata Sons
This involves merging units Tata Electronics Systems Solutions Pvt Ltd and Tata Consulting Engineers Ltd with Tata Sons. The restructuring proposal is aimed at allowing Tata Sons to cease being a core investment company and thereby avoid having to list.
The trustees also rejected the suggestion that the restructuring could threaten the trusts' charitable status as "an absurd allegation," going on to say that "the Trusts do not run Tata Sons and do not seek to," addressing another point raised by Srinivasan and Singh.
The trustees said the idea behind the restructuring proposal was not new. "The letter does not announce any new position. The position that Tata Sons should remain an unlisted company has been the settled position of the Trusts, and of Tata Sons itself, for years," they said.
They cited a March 2024 Tata Sons board decision to remain unlisted, followed by repayment of borrowings and redemption of preference shares aggregating about Rs 20,000 crore. They also pointed to unanimous resolutions by SDTT and the Sir Ratan Tata Trust (SRTT) on May 28 and July 28 last year authorising Tata Sons to explore ways to preserve its unlisted status, including talks with the Shapoorji Pallonji (SP) Group for an exit from its shareholding.
SDTT and SRTT together hold about 51.54% of Tata Sons, accounting for most of the 66% Tata Trusts stake. The trustees said the September 28 letter was issued under the authority of the July 28, 2025, resolution and in response to a request from Tata Sons.
Tata's argument
The Tata Sons board had met on September 17 to consider the RBI communication and agreed that all options, and not listing alone, should be explored. It also asked the Tata Trusts to work on options for complying with the RBI communication.
"Far from usurping the functions of the board of Tata Sons, the Trusts responded to its request," the trustees said.
The trustees also criticised Srinivasan for voting in favour of N Chandrasekaran's reappointment as Tata Sons chairman at the September 17 board meeting despite an August 13 SDTT resolution to initiate the selection process for a successor.
"The affirmative vote which Articles 118 and 121 confer for the protection of the Trusts was thus overridden by reason of the vote of the Trusts' own nominee," they said.
They also accused Srinivasan and Singh of contradicting their call for collective deliberation by approaching the charity commissioner on September 25 seeking restrictions on SDTT meetings and circular resolutions. "Your protestation rings hollow," the trustees said.
They accused Singh and Srinivasan of publicly supporting the listing from April 2026 without first raising their changed views with fellow trustees.
"This airing of your individual views undermined the Trusts' resolutions, as also the pending application made by Tata Sons to RBI. This was in breach of your fiduciary duties!" they said.
The trustees said their views were relevant to any restructuring requiring shareholder approval, in the context of Tata Trusts' majority stake in Tata Sons. "The views of the shareholders who hold about 66% of Tata Sons are therefore not an intrusion upon the process. They are an indispensable part of it, and it is responsible, not improper, for them to be stated at the outset," they said.
