Among the first decisions taken by N. Chandrasekaran as chairman of Tata Sons was to tighten the holding company’s control over the $103-billion conglomerate, recently shaken up by a power struggle between Cyrus Mistry and Ratan Tata.
The Tata Sons board approved a resolution to invest up to Rs 10,000 crore in various Tata group companies at the first board meeting chaired by Chandrasekaran on February 21.
“Resolved that approval of the board of directors be and is hereby granted to the company to invest amounts not exceeding Rs 10,000 crore for subscribing to issues of securities and/or purchasing securities in various companies of which Tata Sons Ltd is the promoter and/or a shareholder,” according to the resolution, a copy of which has been filed with the Ministry of Corporate Affairs.
The filing didn’t give any reasons or mention the companies in which the funds would be invested.
Another big decision related to investment
The board, on the same day, also decided to raise up to Rs 7,000 crore by selling bonds to refinance debt, invest in securities or provide loans to companies.
The fund-raising could be done in one or more tranches. “We do not share information on such matters. Suffice it to say that, from time to time, Tata Sons raises funds as part of its ongoing activities,” Debasis Ray, Tata Sons group spokesperson, told ET in an email.
Mistry Versus Tata
Mistry has launched a legal battle against the Tatas at the National Company Law Tribunal. The Shapoorji Pallonji group, owned by Mistry’s family, has an 18.4% stake in Tata Sons.
During the fight for control, Mistry refused to step down from the chairmanship of listed Tata companies. Ratan Tata had to rely on Tata Sons’ shareholding and the support of institutional investors to remove him from these boards.
About Tata Sons
He sees binding the group together— with its three-tier structure of Tata Trusts at the top, Tata Sons in the middle and then the operating companies —as a key responsibility that comes with the job.