TCEL, which is now wholly-owned by the group holding company, has recently assumed the turnkey projects and consulting division of Tata Sons.

Company sources said that the shareholding of the group officials - Tata Sons company secretary and vice-president Farokh Nariman Subedar, Tata Financial Services general manager Phillie Dara Karkaria, Tata Sons deputy company secretary RR Shastri and Tata Sons finance manager KR Bhagat - has been recently acquired by Tata Sons at face value of Rs 10 each.

TCEL, which was a shell company before the transfer of the turnkey projects division with a modest equity base of Rs 5,000, has since increased its share capital to Rs 10 crore.

According to company officials: "The assets and liabilities related to the turnkey division is being transferred to the new company (TCEL) which will pay Tata Sons a consideration for the transfer partly through an issue of equity capital not exceeding Rs 5 crore and the balance to be paid in cash or debt instrument."

Company sources say that TCEL was formed by Tata Sons along with four of its executives to make the transfer of assets easier.

"When Tata Sons' turnkey projects division was transferred to TCEL, the executives sold off their stakes back to their employers," said a group official. TCEL, officials said, has been formed to give the division complete autonomy and help it function as a separate profit centre.

The assets and liabilities related to the division has been transferred to the new company, which will pay TSL the consideration for the transfer of the division partly through a issue of equity capital. Tata group officials rule out the possibility at this stage of dilution of stake in the company.