Tata Steel Long Products Ltd, formerly Tata Sponge, has put its plans to shift the company’s registered address from Odisha to Bengal on ice after receiving some feedback from “key stakeholders”.

The company had proposed to shift the office, which is important for regulatory and tax purposes, to Calcutta from Joda, where its sponge iron plant is located, and passed a resolution to this effect during the annual general meeting on July 15, 2019.

TSLPL, formerly Tata Sponge, has now disclosed that it has decided not to pursue the proposal. “Basis the feedback received from the key stakeholders, the board at its meeting held on June 09, 2020, decided not to pursue the said proposal of shifting the registered office of the company, for the time being. Hence, the registered office of the company will continue to be at Joda, Odisha,” the company informed shareholders in the annual report.

Shifting of headquarters or a registered office are often fraught with resistance, both political and local. For instance, any move to relocate public sector undertakings such as Coal India or Damodar Valley Corporation and regulator Tea Board of India from Calcutta has always drawn strong protest from all quarters in Bengal.

Likewise, a plan to move the registered office of TSLPL would be challenging given the large and expanding presence of Tata Group in Odisha.

The need to keep the Naveen Patnaik government in good humour is paramount given that Tata Steel Group, the parent of TSLPL, operates iron ore, chrome ore mines and two large integrated steel plants at Kalinganagar and Angul. Apart from expanding the two plants, it is contemplating construction of a new port in Odisha — tasks that would require administrative support. In comparison, Tata Group’s presence in Bengal has grown modestly in the last 10 years.

Sources said TSLPL realised it was not worth the effort to shift the registered office given the sentiments attached to it. However, the corporate office of the company is now formally located at Tata Centre in Calcutta, the address of various Tata Steel Group companies.

A synergy with the rest of the group firms was one of the drivers for the proposed shift. Explaining the rationale, it had informed the shareholders in 2019. It had cited “operational efficiency and convenience of the board of directors” as some of the reasons for the shift.

“Tata Steel is the parent company of Tata Sponge and all major Tata Steel Group companies have their registered offices in Calcutta. For the ease of liaising with common regulatory authorities and to meet other compliance requirements smoothly, the company proposes to shift its registered office within the same jurisdiction i.e. to the state of Bengal and within the jurisdiction of the registrar of companies at Calcutta.

“To improve operational efficiency and convenience of the board of directors and to streamline the management of affairs, the board of directors at its meeting held on April 18, 2019, accorded their recommendation to shift the registered office of the company from Odisha to Bengal.”

It had noted that such a move was “in the best interest of the company, shareholders and all parties concerned and shall not be detrimental to the interest of members of the public, shareholders, creditors or employees”.

It appears now that local interest has trumped for now and Bengal would be a loser, again.