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Sources say that the Indian government is seeking a resolution to the dispute with Tata Charity arm.

Sources told Wednesday that two senior Indian ministers, in a rare intervention, have urged Tata Group’s charity arm to solve internal boardroom conflicts to ensure stability at its sprawling $180 billion business empire.

A year after Ratan Tata's death, the discord in Tata Trusts has raised concerns that the bitter public spat of 2016 between Tata Sons and the charity could repeat itself, damaging the reputation of India’s most famous group.

Tata Trusts holds a 66% stake of Tata Sons and has the power to make major strategic decisions. Tata Sons is responsible for 30 companies, ranging from autos to consumer goods.

Two industry sources said that the disagreements within Tata Trusts over the past few weeks have been about which trustees would sit on the Tata Sons Board, the overall business direction of the group, and how to handle the planned exit by minority shareholder Shapoorji Palalonji.

TATAS IS ASKED TO RESOLVE ISSUES BY THE INDIAN GOVERNMENT

Two Indian ministers met on Tuesday with N. Chandrasekaran, the chair of Tata Sons and Noel Tata, the head of Tata Trusts in New Delhi to discuss and resolve the dispute. This was according to a government official and a source from the industry.

Sources said that Finance Minister Nirmala Sitharaman attended the rare direct intervention of the government.

Indian media reported that the other senior official was Minister of Home Affairs Amit A Shah.

The official who was present at the Tuesday discussions said, "The government wants to restore stability and resolve issues."

Sources declined to name themselves as the matter was confidential.

Tata Trusts & Tata Sons has not publicly commented on this matter which was widely reported in Indian Media. Both companies did not respond to requests for comment.

India's Finance Ministry and Home Affairs Ministry did not respond to comments.

Tata Trusts disagreed with Cyrus Mistry, the Tata Sons chairman, and it led to a legal dispute. Mistry died 2022, but his family firm, Shapoorji Pallonji still holds an 18% stake.

According to industry sources, the current main disagreement among Tata Trusts trustees is how Shapoorji will implement his long-delayed plans to split with the Tatas and the impact on the conglomerate.

Shapoorji pallonji has not responded to our request for comment. Aditya K. Kalra, Aftab A. Ahmed, Ira Duggal Aditi S. Shah, Khushi M. Malhotra and Joe Bavier contributed to the reporting.

(source: Reuters)