A bitter struggle is raging in Tata group. It atose after Tata Sons chairman, N Chandrasekharan announced that he is not seeking an extension.
But the board of the holding company has approved another five years for him. Chairman of the Tata Trusts, Noel Tata opposing the decision have given the events a dramatic turn.
The Tata Sons board has gone against its largest shareholder. For Tata Sons hold about 66 per cent stake in the holding company.
A protracted legal battle may ensue. This would not be in the best interest of the group, its shareholders and the larger economy.
Internal conflicts within the group have been shimmering for sometime. Chandrasekharan and Noel Tata had strong differences of opinion on different issues.
Tata trustees have themselves been at loggerheads. The board has also decided to pursue a public listing following RBI’s decision to reject Tata Sons application to surrender its registration as a core investment company.
The decision was opposed by Noel Tata. He intends to keep the company private and has expressed his decision.
The lines of power and accountability have to be clearly delienated. This is to bring in greater transparency in dealings and operation.
An institutional crisis may evolve. It would do no good to the reputation and operation of the Tata group.
The Tatas are engaged in a large spectrum of activities including some of national interest. It cannot afford uncertainty and instability and must put its house in order.
