New Delhi [India], September 21 (ANI): Most Tata Group stocks remained under pressure during the early hours of Monday's trading session as the dispute between Tata Trusts and Tata Sons over the leadership and future structure of the conglomerate escalated, with investors closely watching the possibility of legal proceedings and renewed uncertainty around Tata Sons’ proposed listing.
As of 1224 IST, Tata Capital fell nearly 3 per cent at Rs 341, while Tata Power declined 2.5 per cent to Rs 365.55. Tata Investment Corporation fell 2.3 per cent to Rs 685.90 and Tata Technologies slipped 2.2 per cent to Rs 707. Tata Elxsi declined 2 per cent to Rs 3,268, touching a fresh 52-week low. Tata Motors Passenger Vehicles was down around 1 per cent at Rs 301, while Tata Motors Commercial Vehicles fell 1 per cent. Tata Communications declined 1.5 per cent to Rs 1,746.80 and Tata Teleservices was down 1.4 per cent at Rs 35.25.
Despite a negative sentiment, the Nifty 50 major, Tata Consultancy Services traded in the green and was up nearly 1 per cent at Rs 2,122.50 on the National Stock Exchange.
The immediate trigger is a dispute over Tata Sons Chairman N Chandrasekaran’s reappointment. The Tata Sons board approved a fresh five-year term for Chandrasekaran on September 17 in a 4:1 vote. One out of the two directors voted against the resolution to reappoint Chandrasekaran, Tata Trusts said in a statement on Sunday. But the Trusts alleged that despite this, Tata Sons board went ahead with its decision to reappoint him for another five years on the basis of a casting vote.
Tata Trusts, which holds about 66 per cent of Tata Sons, has challenged the validity of the decision. It argues that Tata Sons’ Articles of Association require affirmative support from a majority of the Trust-nominated directors. Since one of its two nominees voted against the resolution, the Trusts contend that the required condition was not met and that a chairman’s casting vote cannot override it.
The dispute also comes as Tata Sons faces renewed pressure over its potential listing after the Reserve Bank of India rejected its request to surrender its registration and continue as a private company. This has brought the future ownership and structure of the group’s holding company back into focus.
The developments are expected to keep Tata Group counters sensitive to further announcements on the leadership dispute, governance arrangements and Tata Sons’ listing plans. (ANI)
Tata Group stocks under pressure as Tata Trusts-Tata Sons rift deepens
