MUMBAI: Batting yet again for a public listing of Tata Sons amidst the deepening crisis of confidence and trust in the House of Tatas, Shapoorji Pallonji Mistry, the brother-in-law of Tata Trusts chairman Noel Tata and the chairman of Shapoorji Pallonji Group that owns 18.4% of the group, has said the objective of taking the company is not victory for one side but building a stronger institution with greater accountability.
Welcoming the belated RBI decision that came in after 30 months to reject the Tatas’ bid to remain private and instead forcing it go public, Mistry in a statement said Friday: “the objective of taking Tata Sons public is not victory for one side. The objective is a stronger Tata institution, stronger philanthropy, greater accountability, deeper partnership and, ultimately, greater service to the nation.”
The statement comes a day after a boardroom coup at the Bombay House saw the other Tata Trusts nominee director Venu Srinivasan defying the trusts' orders to vote against group chairman N Chandrasekaran’s reappointment for another five-year term and also backing the listing, along with all other directors, the decisions that Noel described as patently “illegal”. It also comes a day after Noel presented to the Tata Sons board a partial exit route for the SP Group through share buybacks or some cash-payout to the group that’s neck-deep in debt with a debt pile of over Rs 50,000 crore.
Meanwhile, after a sharp rally on the day of the board meeting, the shares of most Tata Group stocks fell Friday. The market reaction was also partly due to SP Group’s proposal to sell a portion of their stake in Tata Sons for at least Rs 25,000 crore.
Tata Chemicals was down over 7.8%, Tata Investment down 4%, Tata Motors PV down 3% and Tata Power trading down over 1.5%, reversing the entire gains made Thursday.
“I welcome the decision of the RBI (to ask Tatas bid to remain private by cancelling its NBFC licence) wholeheartedly, as I believe it marks a pivotal moment not merely for Tata Sons, but for the principles of transparency, accountability, fairness and responsible institution-building that should guide enterprises of national importance. The Reserve Bank has provided full clarity by retaining Tata Sons in the upper-layer NBFC list under its scale-based regulatory framework, and the prescribed listing route follows from that regulatory architecture,” Mistry said.
He further said he has been repeatedly saying that “a public listing of Tata Sons is not merely a financial or regulatory matter. It’s a social and moral imperative. It’s about strengthening transparency and public accountability in one of the most consequential business institutions, while preserving and advancing the extraordinary philanthropic purpose that lies at the heart of the Tata legacy.”
“The RBI decision should not be viewed as a victory of one stakeholder over another. It should be viewed as an opportunity to bring people and institutions together, as listing of Tata Sons can become a bridge. A bridge between shareholders and the trusts, between private heritage and public accountability, and between generations of stewardship,” he argued further.
Noting that the founding philosophy of Jamsetji Tata provides the moral foundation, Mistry quoted Jamsetji: “In a free enterprise, the community is not just another stakeholder in business but is in fact the very purpose of its existence.”
“This very philosophy should guide the next chapter of Tata Sons. The question before us should not simply be who owns what, or how a corporate structure is preserved. The larger question should be how can one of the greatest industrial institutions become even stronger, more transparent, more accountable and more capable of serving the nation,” Mistry said.
Because, “I believe a transparent and publicly accountable Tata Sons can strengthen the entire ecosystem. It can broaden participation, enhance governance, give greater visibility to value, protect the legitimate interests of investors and provide the basis for a more robust and equitable dividend policy. Most importantly, it can strengthen the capacity of the Tata Trusts to pursue their philanthropic responsibilities over generations. A stronger Tata Sons, operating transparently and responsibly, can help make that ambition possible through sustained enterprise growth and a durable flow of value towards philanthropy.”
Noting that Tata Sons now stands at the threshold of another extraordinary era, moving decisively into semiconductors, advanced manufacturing, aviation, defence, artificial intelligence, digital technologies, energy and strategic infrastructure, he said these are not simply new businesses; they are capabilities that will shape India’s economic sovereignty and competitiveness in the decades ahead.
Appealing to every section of the Tata group-–individual trustees, Tata Sons, its leadership, its shareholders, employees and all other stakeholders to come forward in a spirit of harmony and shared purpose, he said, “a holding company of this stature should be capable of combining capital, innovation and enterprise with the conscience and trusteeship that have distinguished the Tata name. Let us not allow the listing to become even a minor point of division. Let us use it as a bridge. Let us make it an opportunity for reconciliation, renewal and a stronger institutional future.
“The RBI decision can, therefore, become far more than the conclusion of a regulatory question. It can become a landmark in the evolution of corporate governance–an affirmation that scale and heritage can coexist with transparency; that philanthropy can coexist with public accountability; and that great private institutions can evolve in step with the aspirations of a great nation,” Mistry concluded.
