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Finance Ministry asks banks, LIC to keep watch on Tata group developments
Amid on-going boardroom battle at Tata Group, Finance Ministry has asked financial institutions including LIC and banks to keep a watch on developments to safeguard the interest of investors.
New Delhi: Amid on-going boardroom battle at Tata Group, Finance Ministry has asked financial institutions including LIC and banks to keep a watch on developments to safeguard the interest of investors.
Since LIC as well as banks have invested depositors' money in various companies under Tata Sons, it is their duty to see that public money is not put at risk, Finance Ministry sources said.
Safeguarding depositors' interest is paramount, they said, adding that as investors, banks and financial institutions are keeping a close watch on various developments taking place post the ouster of Cyrus Mistry as chairman of Tata Sons.
Sources said that while there is no doubt that Tata Group is one of the largest and reputed industrial houses in the country, Standard Operating Procedure has to be followed in all the cases.
Life Insurance Corporation of India alone has an exposure of about Rs 37,500 crore to different Tata Group companies.
While LIC owns 3.2 per in TCS, which is the most profitable Tata firm, it owns 13.6 percent in Tata Steel which is the most troubled group company now due to the lingering troubles at its British operations.
At the same time, New India Assurance -- another public sector insurance firm -- owns 1.17 percent in Tata Steel.
In Tata Power LIC owns 13.1 percent stake, 7.13 percent in Tata Motors, 8.8 per cent in Indian Hotels and 9.8 percent in Tata Global Beverages.
Mistry was unceremoniously removed last month by the board of Tata Sons as its Chairman. Interim chairman Ratan Tata has met V K Sharma, the acting chairman of LIC.
Mistry has accused Tata Sons of cornering him into being a "lame-duck" chairman in the near four-year tenure and also hiding USD 18 billion of potential write-downs across five group firms, including Tata Motors and Tata Steel Europe.
He has also alleged potential financial issues at the various companies and violations of securities regulations.
His family firm Shapoorji Pallonji Group has 18.4 percent in Tata Sons. As much as 66 percent shares in Tata Sons are held by philanthropic trusts endowed by members of the Tata family.