Mumbai, Oct 10 (NationPress) The board members of Tata Trusts are expected to convene on Friday following government involvement aimed at reducing tensions within a boardroom conflict at the influential philanthropic organization that holds indirect control over the Tata Group, according to sources.

This meeting is a direct result of a government-facilitated dialogue that took place on Wednesday, during which officials encouraged representatives from Tata Trusts and Tata Sons Private -- the holding entity of the Tata Group -- to mend their differences to ensure that the group's operations remain stable.

The discord reportedly arose when some trustees dismissed former Defence Secretary Vijay Singh as a nominee director from the Tata Sons board and made attempts to oust another director, Venu Srinivasan.

Both individuals are believed to have close ties to Noel Tata, who is currently the chairman of Tata Trusts.

Tata Trusts possesses a 66% stake in Tata Sons, granting it the power to appoint one-third of the company's board members and to veto significant decisions.

This power dynamic endows Tata Trusts with a critical voice in strategic affairs, becoming the core of the ongoing power tussle.

Reports indicate that a significant topic dividing the board is the potential public offering of Tata Sons.

The Reserve Bank of India had previously categorized Tata Sons as an 'upper-layer' non-bank financial company, a classification that necessitates going public.

Some trustees are apprehensive that an initial public offering (IPO) could dilute their veto power and make the company more susceptible to takeover threats and stricter governance regulations.

Concerns have also been raised that 'majority of minority' voting provisions could potentially empower the Shapoorji Pallonji (SP) Group -- which holds an 18.37% stake -- with increased influence.

This shift could transfer authority from Tata Trusts to the Tata Sons board and public investors, as per reports.

However, a resolution to this issue seems unlikely in the near future. Reports suggest that Tata Sons anticipates new guidelines from the Reserve Bank of India by year-end, which may exempt the company from mandatory public listing.

In the meantime, Tata Sons Chairman Natarajan Chandrasekaran has been instructed by trustees to initiate discussions with the Shapoorji Pallonji Group regarding a peaceful exit from the holding company.

The SP Group has been looking to divest its stake to alleviate debt burdens but has struggled to find a buyer.

Reports suggest that the SP Group is considering various options, including potential purchases of its shares by Tata Sons.

The group aims to utilize the proceeds from any sale to repay debts incurred by its infrastructure division, thereby reducing borrowing costs and enhancing its financial stability.