Key developments are unfolding at the Tata Group, where Noel Tata, who became Chairman of Tata Trusts after the death of Ratan Tata, is taking a firm line on the conglomerate’s investments. He has made it clear that not a single rupee should be spent from Tata Sons without a sound business plan and a proper assessment of risks. His insistence that every paisa of a ₹23,000 crore funding proposal be accounted for has become a major talking point in business circles.
Objection to ₹23,000 Crore Investment Plan
A plan to invest more than ₹23,000 crore was placed before the Tata Sons board at its meeting in June. The funds were meant to support Air India and to be deployed in Tejas Networks, the Tata Neu app and Tata Digital.
Noel Tata raised serious objections, saying board approval alone was not sufficient. He asked for a detailed report on where the money would be spent and whether it carried a risk of losses.
His position carries weight because of the governance rules at Tata Sons. Any investment above ₹100 crore requires the approval of a majority of the directors nominated by Tata Trusts. Noel Tata is one of the two key nominee directors, the other being Venu Srinivasan. Without his consent, no major transfer of funds can go through.
Dispute Over Chairman’s Tenure
Noel Tata held to his approach at the board meeting in September, again insisting that every proposal come with a proper business plan. The issue of extending the tenure of Tata Sons Chairman N. Chandrasekaran also came up at the meeting. Noel Tata questioned that proposal as well, further escalating the dispute.
Regulatory requirements have added to the difficulties. The Reserve Bank of India has classified Tata Sons as an Upper Layer company and directed it to list on the stock market through an IPO. The RBI did not accept the company’s request for an exemption.
Noel Tata proposed splitting the company into two to resolve the issue, but the RBI maintained that the rules must be followed. With the funding review, the chairman’s position and the RBI’s listing mandate all unresolved, internal tension within the Tata Group continues.