London: Senior advocate and former Solicitor General of India Harish Salve has said he is advising Tata Sons Chairman N Chandrasekaran amid the ongoing governance differences between Tata Sons and Tata Trusts, and asserted that the company's legal position is "legally perfect."
Speaking exclusively to ANI, Salve said the issue surrounding Tata Sons and the Reserve Bank of India's regulatory directions was "very straightforward", with the RBI requiring the company to comply with the rules applicable to Core Investment Companies (CICs).
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Salve said Tata Sons had earlier taken the position that repayment of its loans in 2019 meant it was no longer required to be registered as a CIC. However, according to him, the RBI did not accept this position, noting that companies in which Tata Sons holds majority stakes continued to have loans.
"One important thing is they have to turn into a public company. That's all that there is to it," Salve said.
On the governance dispute, Salve said some Tata Trust trustees were opposed to Tata Sons becoming a public company. Referring to a recent board meeting, he said two trustees attended, with one voting in favour and the other against the proposal.
Salve said a company with assets worth around Rs 2 lakh crore could not be allowed to remain paralysed because of differences between trustees. He also defended the chairman's casting vote in the board meeting.
He said the situation further strengthened the case for Tata Sons becoming a public company and claimed that once it does so, restrictions contained in its Articles would fall away.
On the proposal to list Tata Sons on a stock exchange, Salve said the Tata group had grown into a global institution and that greater transparency and professional management were important for an organisation of its scale.
"Tatas today are the face of India," Salve said, adding that the group has interests in sensitive sectors including aviation, defence and emerging areas such as hydrogen.
He said institutions need to evolve with changing times and that the best talent should be allowed to run them "for the sake of not just the company, not for the shareholders, but for India."
