Venu Srinivasan, Vijay Singh, Say They Were Not Consulted on Tata Sons Merger Proposal

New Delhi: Venu Srinivasan and Vijay Singh, two senior trustees of Sir Dorabji Tata Trust (SDTT), the largest shareholder in Tata Sons, have written to their fellow trustees highlighting their concern over a Tata Sons merger proposal in which they were not consulted. The letter has been sent to the Sir Ratan Tata Trust as well, reports Financial Express.

The two trustees said they were surprised the SDTT had proposed reorganising the holding company by merging Tata Electronics Systems Solutions (TESS) and Tata Consulting Engineers (TCE) into Tata Sons. “We were not consulted, and are not aware that the other trustees were consulted either,” they said, as per the publication.

At a recent press briefing, Tata Trusts consultant and Tata Sons veteran Farokh Subedar had said that both the key trusts SDTT and SRTT had passed a resolution authorising their chairman, Noel Tata, to take action and find solutions to keeping Tata Sons privately held.

As per the FE report, Subedar said during the briefing that trustees not in the know of the proposal would be sent copies of it.

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The merger is understood to be a step to avoid having to list on the stock exchanges, as required by the banking regulator RBI for certain classes of Non-Banking Financial Institutions.

Given the possible impact of reorganisation, the two trustees have said its legal, financial, commercial and governance implications should have been examined before a position was taken in the trust’s name.

They also questioned the shareholder, SDTT, instructing a company’s board to “approve” a matter that the law reserves to the board’s independent judgment. They suggest the shareholder could have proposed a course of action for the board’s consideration.

Srinivasan and Singh raise questions as to whether the merger decision was in the best interests of Tata Sons and the Tata Group, adding that such a decision requires considering its consequences for Tata Sons, the trusts and other stakeholders, as well as alternative courses of action.

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