Tata Trusts Chairman Noel Tata on Saturday made a strong case against listing Tata Sons. Speaking at the Hindustan Times Leadership Summit, Tata warned that bringing in tens of thousands of public shareholders could push profit ahead of philanthropy and change how the group has worked for generations.

"My worry is that listing, which is what some people are proposing, will change this way, this Tata way," he said, adding, "And one day, if we have 30,000, 40,000 shareholders, profit may take precedence over philanthropy. And I think that would fundamentally change the Tata way of working."

Tata built his argument around what he called a single premise. "Charity precedes commerce. Charity owns commerce. It's not the other way around," he said.

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The remarks come as the listing question has divided the group's leadership. At a meeting on September 17, the Tata board approved a fresh five-year term for Executive Chairman N Chandrasekaran, with Noel Tata the only director to vote against. The board also decided to proceed with a public listing rather than challenge the RBI decision, which Tata opposes. Noel Tata heads the Tata Trusts, which controls 66% of Tata Sons.

"Dividends from some of our listed companies, which come through the channel, become tomorrow's hospitals, tomorrow's flood relief, tomorrow's education institutions, tomorrow's relief for people in crisis," Tata said. "This profit becomes, in a way, a public good... It repeats itself every year, year on year, by design," Noel Tata said, building his case against public listing.

"In this particular case, the owner cannot die. The owner cannot be bought. And the owner cannot retire. So there is a continuity in the Tata way," he continued.

Noel Tata further said keeping the holding company private also lets it support group firms in difficulty. "The other thing that staying private does is Tata Sons remains the backstop for all or any Tata companies that ever gets into trouble. And that is an important glue which keeps the entire group together," he said.

Outside investors, he said, would be within their rights to question such support. "The moment you have a separate set of investors in Tata Sons from a separate set of investors in a company that requires funding, they're quite right to ask, why do we want to make investments here? You should only be making investments in what will deliver and allocating capital to the most profitable ventures. And therefore the nature of the group is going to change."

"Why tinker with something that has delivered such value for 150 years? Why do we want to change that?" he asked.

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Tata said the Trusts would "play a constructive role with the regulators, with others, to try and find a solution which keeps the Tata way the way it is."

On the question of Tata Sons' performance, Noel Tata said he backed the group's strategy but questioned how it was being carried out.

"The strategic direction, as I've said now twice or thrice, remains the same. Philanthropy on one hand, nation building on the other hand. This is independent of the leadership, of personalities. This is embedded in the DNA of the group," he said.

"I have not asked or questioned the direction of what we've done. I question sometimes the delivery of what we're doing," Tata said.

"The question is, do we have the discipline when we execute projects and not the direction? How will projects with a long gestation period succeed if we don't have discipline? And how will we allocate capital to those projects?"

"So very clearly, direction is fine, but we also need discipline of execution in these very large projects," he said.