MUMBAI: Tata Trusts chairman Noel Tata intends to tell the Tata Sons board on Thursday that the company should remain private and unlisted, pushing back against RBI’s decision that has brought it closer to a mandatory stock-market listing, according to a person close to him.Noel plans to argue that RBI’s Sept 11 letter requires Tata Sons to comply with rules governing upper-layer non-banking financial companies but does not explicitly direct it to list its shares, the person said.He is also expected to ask Tata Sons to seek an explanation from RBI for rejecting its application to surrender its core investment company registration, and to ask the regulator to reconsider before the company takes further steps.“If Tata Sons has to comply with NBFC rules, we will do that,” the person said. “Compliance doesn’t mean only listing. There are other ways to comply with the rules.”Noel in no mood to relent on ChandraTata Trusts had unanimously resolved last year to recommend extending Chandrasekaran’s term by another five years. After the Feb board meeting — where four directors backed the extension and Noel Tata alone opposed it — Noel had considered offering Chandrasekaran a two-year extension instead, taking him to 65, the retirement age for executive directors. But he now appears in no mood to relent even though his stand may be at odds with the views of most members of the Tata Sons board. His position is that Chandrasekaran ruled out another term himself in his August letter to the Tata Sons board. With that decision on record, the focus should now shift to finding his successor, the person said. Sir Dorabji Tata Trust (SDTT), a key shareholder of Tata Sons, has already indicated the need to constitute a selection panel for Chandrasekaran’s successor. SDTT has sent a letter to Tata Sons, which Noel Tata expects the NRC to consider and table before the board at its Thursday meeting. Apart from Noel Tata, Chandrasekaran and Tata Sons chief financial officer Saurabh Agrawal, the rest of the board sits on the NRC — Tata Trusts vice-chairman Venu Srinivasan and independent directors Harish Manwani and Anita George.Chandrasekaran’s letter to the board followed months of uncertainty over an extension. In the letter, he said a proposal to extend his tenure had failed to secure unanimous support, with one board member opposed. That member was Noel Tata.Noel Tata’s reluctance to approve Chandrasekaran’s reappointment stemmed from disagreements over the financial performance of certain businesses and the future structure of Tata Sons. Under Tata Sons’ articles of association, a five-member panel must be formed to recommend a candidate, with the formal appointment made by the Tata Sons board. Three members must be jointly appointed by SDTT and the Sir Ratan Tata Trust; the remaining two are nominated by the Tata Sons board — one a board member, the other an outsider.These developments come even as Tata Sons faces a regulatory issue, after the Reserve Bank of India rejected its application to surrender its registration as a core investment company, requiring it to comply with rules applicable to NBFCs. “The two matters are unrelated,” the person close to Tata said, “with the regulatory issue having no bearing on Chandrasekaran’s decision to leave.
