QUITE A LOT appears to be happening at the Tata empire. N Chandrasekaran is to get the trust vote to remain as the chairman of Tata Sons for a third consecutive term. This unanimous decision from all trustees of the key holding entities, Sir Ratan Tata Trust and Sir Dorabji Tata Trust is significant. It indicates a sense of continuity in the post-Ratan Tata era. Importantly, the holding entities have also decided that Tata Sons should remain an unlisted entity. What is even more significant is the reported suggestion to Chandrasekaran to initiate exit talks with the Shapoorji Pallonji group. This group, led by Shapoor Mistry, brother-in-law of Tata Trusts’ chairman Noel Tata, owns an 18.4 per cent stake in Tata Sons. Following a high-profile legal dispute over the removal of Cyrus Mistry, the SP Group publicly declared its intention to exit the company. Much water has flown under the bridge since his ouster from the chairmanship of Tata Sons and subsequent death due to a tragic car accident. Talking of the exit is one thing. But making it happen is quite a challenging task. The primary challenge lies in arriving at a fair valuation for the stakes. There are many examples in the corporate world where an unlisted holding company with more than one shareholder has multiple listed subsidiaries. Like Tata Sons, the Murugappas too in the south, faced a similar challenge. However, they settled it off the court. In the case of Tata Sons, the claims and counter-claims over the valuation could prove a big challenge and hurdle. Yet, if they find a solution, it could be a template for others emulate.
