Maharashtra Charity commissioner halts key Tata Trusts meeting citing pending probe

The pivotal board meeting scheduled for 16 May was expected to see trust chairman Noel Tata nominating new board members of Tata Sons Pvt, the group’s holding company.

Signage for Tata Consultancy Services Ltd. is displayed outside the company's headquarters in Mumbai, India, on Saturday, Nov. 5, 2016. Cyrus Mistry, the ousted chairman of India's biggest conglomerate, was replaced as Tata Sons chairman by his 78-year-old predecessor Ratan Tata at a board meeting on Oct. 24. Tata Sons said the conglomerate's board and Trustees of the Tata Trusts were concerned about a growing “trust deficit” with Mistry, which prompted the company to remove him. | Photographer: Dhiraj Singh/Bloomberg

An Indian state regulator has ordered Tata Trusts to postpone its board meeting scheduled for May 16 and halt further engagements until an investigation into alleged regulatory violations is completed.

The directive, issued on Friday by Maharashtra Charity Commissioner Amogh S. Kaloti, puts the brakes on a pivotal meeting where Tata Trusts Chairman Noel Tata was expected to nominate new board members of Tata Sons Pvt., the holding company of the Tata Group.

The regulatory intervention lays bare a deepening rift over whether to take Tata Sons public, at India’s most storied conglomerate that produces everything from salt to software and cars. The company is facing regulatory pressure to list considering its large asset holdings, and some investors see going public as a needed step to expand further.

But Noel Tata opposes taking public the parent company of the conglomerate run by his family established in 1868. Tata Trusts controls roughly two-thirds of Tata Sons, giving its leadership outsized influence in shaping the group’s strategic direction.

The regulator warned that decisions taken during a pending inquiry could lead to “further complications and multiplicity of proceedings,” invoking the law in Maharashtra state.

The freeze follows two separate complaints filed in April by advocate Katyayani Agrawal and Venu Srinivasan, a trustee of the Sir Ratan Tata Trust. Both allege that avoiding listing amounts to non-compliance with trust composition laws.

Tata Trusts confirmed receipt of the order in a statement late Friday, saying the Sir Ratan Tata Trust was unaware of Srinivasan’s complaint and is currently reviewing the legal directions.

Trustees Srinivasan and Vijay Singh intend to push Tata Sons for a public listing, aligning with Reserve Bank of India mandates for large shadow banks. The RBI has informally signaled it won’t grant Tata Sons an exemption from listing requirements.

Disclaimer: This report is auto generated from the Bloomberg news service. ThePrint holds no responsibility for its content.