Shapoor Mistry, chairman of the Shapoorji Pallonji Group, has welcomed the Reserve Bank of India's decision requiring Tata Sons to comply with regulations applicable to upper-layer non-bank financial companies (NBFCs), saying the move could improve transparency and accountability at the Tata group's holding company.
The Shapoorji Pallonji Group owns about 18.4 per cent of Tata Sons. Mistry said the RBI's decision had provided "full clarity" and that he looked forward to working with Tata Sons and the Tata Trusts on the company's future.
RBI decision clears way for Tata Sons listing
The RBI had rejected Tata Sons' request to surrender its registration as a core investment company on September 11 and directed it to comply with the applicable regulatory framework.
The decision could pave the way for a public listing of Tata Sons after years of efforts to retain its privately held status.
"This landmark decision should not be viewed as a victory of one stakeholder over another. It should be viewed as an opportunity to bring people and institutions together," Mistry said in a statement.
He said a Tata Sons listing could serve as a "bridge" between shareholders and the Tata Trusts, as well as between private ownership and public accountability.
Mistry highlights long Tata-SP Group ties
Mistry also referred to the more than century-old association between the Shapoorji Pallonji and Tata groups, saying it had been built over generations through enterprise, trust and shared experiences.
"I therefore look forward not merely to a resolution of the present chapter, but to forging a greater partnership, greater engagement and deeper relationships with Tata Sons and the Tata Trusts in the years ahead," he said.
He added that greater public accountability should not come at the expense of the Tata group's philanthropic mission.
Listing could provide greater visibility
According to Mistry, a listed Tata Sons could offer greater visibility into the value of the holding company while strengthening governance.
He also said such a structure could create a more durable flow of value towards the charitable activities of the Tata Trusts.
Mistry's comments come as Tata Sons faces the regulatory requirements associated with its classification as an upper-layer NBFC, a status that brings it under a broader regulatory framework.