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Any changes to the Articles of Association require approval through a special resolution at a general meeting, it said. Tata Trusts owns about 66% of Tata Sons and currently relies on Articles 104B and 121 to protect its influence, including board nomination rights and affirmative voting powers.
A public listing would bring these special rights under Sebi Regulation 31B. This regulation requires shareholder approval at least once every five years, with public shareholders playing a key role in deciding whether the rights continue.
Currently, Tata Trusts can nominate up to one-third of the board. Certain decisions need the affirmative vote of a majority of Trusts-nominated directors, and a majority of these nominees must be present for a board meeting to form a quorum, the report stated.
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The review may also address the process for selecting the chairman. The existing five-member selection committee includes three nominees linked to Tata Trusts. Board committees and restrictions on share transfers may also be adjusted to meet listing requirements.
This exercise follows the Reserve Bank of India’s rejection of Tata Sons’ application to surrender its registration as a core investment company. The RBI’s decision requires Tata Sons to comply with regulations for upper-layer non-banking financial companies, which must list their equity shares within three years of classification.
The listing proposal has revealed differences within the group about the holding company’s future. Tata Trusts chairman Noel Tata has supported exploring alternatives, including restructuring Tata Sons, while the company’s board has backed compliance with the RBI framework.
The review is at an early stage, and no final amendments have been approved. The extent of changes will depend on the proposed listing structure and legal requirements. Tata Sons did not comment.