The government, securities and Exchange Board of India (Sebi) are monitoring the ongoing conflict between the Ratan Tata-controlled Tata Trusts and Cyrus P Mistry. Conflict began after Mistry was suddenly replaced by the board of Tata Sons Ltd, the holding company of Tata Group.
Of particular interest to market regulator Sebi are the ‘red flags’ on corporate governance with respect to listed group companies raised by Mistry in his October 25 letter to the board of directors of Tata Sons and the trustees of Tata Trusts.
“We are looking at the allegations although Tata Sons is an unlisted company and out of the purview of the market regulator. The issues were raised by the previous chairman; Cyrus Mistry is of a serious nature that possibly affects shareholder interests. We are waiting for more information,” a source in Sebi quoted.
With details of Mistry’s letter to the Tata Sons board and trustees of Tata Trusts spilling out in media, the Bombay Stock Exchange and the National Stock Exchange have asked the listed companies named by Mistry to clarify.
“The exchange has sought clarification from Tata Motors Ltd, Tata Power Company Ltd, Tata Steel Ltd, Tata Teleservices (Maharashtra) Ltd, Tata Communications Ltd, Indian Hotels Company Ltd, in response to a news item by Bloomberg wire service under the listing regulations of Sebi,” a BSE executive said.
Meanwhile, a top government official said that the government did not wish the Tata brand name and consequently, the reputation of India Inc, to be sullied. The official said the government would not interfere in the group’s internal affairs.