Trusts may urge Tata Sons to seek RBI review

The RBI’s caveat in court hints at a potential legal battle, with differing views among trustees on whether to support the public listing move.

Tata Trusts want Tata Sons to explore all options, including asking the Reserve Bank of India to reconsider and clarify its decision directing it to go public, before taking legal recourse, two group executives aware of the plans said.

The central bank is understood to have filed a caveat in the Bombay high court on Monday to ensure its position is heard before any judicial order on the public listing of Tata Sons, which could mark the start of a protracted legal tussle between the central bank and India’s largest conglomerate. The decision follows RBI’s Saturday letter rejecting Tata Sons’ request to surrender its registration, which would force it to proceed with a public share sale.

Since Tata Trusts chair Noel Tata and most trustees desire to keep Tata Sons private, the holding company could seek court intervention, Mint reported on 12 September.

“Is it a battle drawn?” quipped a Tata Group executive when asked about RBI filing a caveat, suggesting it is prepared to fight a potential legal suit from the Tata Group.