MUMBAI: Noel Tata, chairman of Tata Trusts, the controlling shareholder of Tata Sons, has called for greater scrutiny of large investments by the holding company, requiring management to present detailed business cases setting out the rationale, expected financial returns and risks of capital commitments before directors sign off on them, said people familiar with the matter.The intervention stems from concerns raised by Noel during Tata Sons board discussions this fiscal year, when a composite investment proposal worth more than Rs 23,000 crore was brought before directors for approval. The composite investment proposal included capital infusions in Air India, Tejas Networks, Tata Digital and other Tata operating entities.
At the June board meeting, Noel said that proposals involving substantial capital commitments needed a formal assessment of expected financial returns and risks rather than being presented solely for approval, the people said.He has leverage. Tata Sons’ articles of association require investments above Rs 100 crore to secure the affirmative support of a majority of Trusts-nominated directors. Noel, who took over the Trusts after the death of his half-brother Ratan Tata in Oct 2024, is one of two such nominees. The other is Venu Srinivasan, chairman emeritus of TVS Motor Company.During the Tata Sons board meeting in Sept, Noel repeated his demand that future investment proposals be accompanied by detailed business cases, the people said. That meeting considered no pending or fresh investment proposals and instead focused on the reappointment of Tata Sons chairman N Chandrasekaran for another five-year term and the company’s response to RBI directives.Noel and other directors had already clashed at that meeting over governance matters and Chandrasekaran’s extension. Noel has since challenged the validity of the board’s decision to reappoint Chandrasekaran, arguing the resolution was not on the meeting agenda and was therefore procedurally flawed.The disputes come amid a wider debate over Tata Sons’ future. RBI rejected the company’s application to surrender its registration as a core investment company (CIC). Since then, Noel has proposed merging two Tata Sons subsidiaries with the holding company as part of efforts to avoid a public listing, while Reserve Bank governor Sanjay Malhotra has reiterated that CICs classified in the regulator’s upper layer are mandated to list.
