Senior advocate and former Solicitor General of India Harish Salve said he is advising Tata Sons Chairman N amid the ongoing governance differences between Tata Sons and Tata Trusts, and described the company’s legal position as “legally perfect”.
Speaking to ANI, Salve said the issue involving and the Reserve Bank of India’s regulatory directions was “very straightforward”, with the central bank requiring the company to comply with regulations applicable to Core Investment Companies (CICs).
Salve said Tata Sons had earlier maintained that repayment of its loans in 2019 meant it no longer needed to be registered as a CIC. However, he said the RBI did not accept this position, pointing out that companies in which Tata Sons holds majority stakes continued to have loans.
“One important thing is they have to turn into a public company. That’s all that there is to it,” Salve said.
Tata Trusts divided over Tata Sons becoming public company
On the governance dispute, Salve said some trustees were opposed to Tata Sons becoming a public company. Referring to a recent board meeting, he said two trustees attended, with one voting in favour of the proposal and the other against it.
Salve said a company with assets worth around ₹2 lakh crore could not be allowed to remain paralysed because of differences between trustees. He also defended the chairman’s casting vote during the board meeting.
According to Salve, the situation further strengthened the case for Tata Sons becoming a public company. He claimed that once Tata Sons becomes a public company, restrictions contained in its Articles would fall away.
Salve backs Tata Sons listing
On the proposal to list Tata Sons on a stock exchange, Salve said the Tata group had evolved into a global institution and that greater transparency and professional management were important for an organisation of its scale.
“Tatas today are the face of India,” Salve said, noting that the group has interests in sensitive sectors such as aviation and defence, as well as emerging areas including hydrogen.
He said institutions need to evolve with changing times and that the best talent should be allowed to run them “for the sake of not just the company, not for the shareholders, but for India”.