NEW DELHI: As the Ratan Tata-Cyrus Mistry spat shows no sign of abating, the possible role of government-owned insurance companies that hold significant stakes in the several publicly-held Tata companies is coming into sharper focus.If the Tatas use the EGM route to try to oust Mistry from the chairmanship, these insurance companies, and particularly Life Insurance of India (LIC), will play an important role as they hold significant double digit equity stakes in Tata Steel Tata Power , and Tata Global Beverages . "They are watching the situation closely," he said. Their sympathy for Mistry however does not necessarily mean that the institutions will support Mistry in the various possible battles that lie ahead.Officials of the insurance companies say they will take a final decision in consultation with the government, and that so far the government has not given them any advise or directions.The government has so far stayed out of the high-profile battle and quietly watched from the sidelines. While both Tata and Mistry have met Prime Minister Narendra Modi and explained their actions to him, the government has taken the view that it should not interfere in a corporate battle. "This is a corporate governance issue," said another official, and not an issue where the government takes a view.Government-owned institutions have traditionally not adopted an activist position in their portfolio companies and have voted along with the promoter or the largest shareholder.They have generally taken the view that they will not destabilize well managed companies.

Source: Economic Times November 09, 2016 19:13 UTC