MUMBAI: The Reserve Bank has filed a caveat in the Bombay High Court seeking that the court hear it if the Tatas challenge its decision asking the company to go public with an IPO.
The central bank had last week rejected--after as many as 30 months--Tata Sons' application to voluntarily surrender its certificate of registration as a core investment company wat back in March 2024 after meeting all the earlier conditions of the central bank, such as becoming debt-free and also stopping pro rata guarantees to group companies for debt raising.
After its September 11 decision to reject the Bombay House application, the RBI advised Tata Sons to take all necessary steps to comply with the guidelines and instructions applicable to an upper-layer NBFC.
Citing sources, TNIE on Monday reported that the Bombay House and the trusts, which own as much as 66.6% of Tata Sons, were planning to file a joint writ petition questioning the impartiality of the central bank’s order, as well as a petition seeking to direct the charity commissioner to lift the stay on the board of the Sri Ratan Tata Trust from meeting.
Tata Trusts chairman Noel Tata was caught off guard by the RBI decision, and he and his aides are exploring legal options to negate the central bank direction, as a listing would alter the trust's control over the country’s largest business house and leadership, as an IPO would bring tighter regulatory oversight, along with greater scrutiny from investors of the group's internal dealings.
A Tata Sons board meeting is scheduled for this Thursday, where the $290-billion conglomerate’s next course of action is likely to be discussed. The six-member board meeting comes against the backdrop of a deadlock over the chairman selection process, as well as differences among the trustees over an IPO.
Tata Sons chairman N Chandrasekaran said on August 12 that he was not available for a third term after his current term ends in late February next year.