The Tatas announced that the divestment of their stake in Tata-IBM and IBM Global Services India, in favour of IBM World Trade Corporation, has been taken under a mutual arrangement between the two companies as part of a reorganisation in the ownership patterns in the companies.

It is learnt that the Tata's decision is part of a plan to stay only in software and related areas, and move out of all hardware operations.

The Tatas hold 50 per cent in Tata-IBM, formerly Tata Information Systems, and a 10 per cent stake in IBM Global Services India through Tata Industries.

The Tatas will, however, continue to hold a token 1 per cent stake in Tata IBM in view of the long-standing partnership with the infotech giant, Tata IBM officials said. The new shareholding structure will come into effect onceIBM obtains Government approval, which will also see a change in the name of the company.

Sources said that despite the new shareholding pattern, the top brass of both the joint-venture companies are likely to remain unchanged. Ranjit Limaye of Tata-IBM, who was appointed managing director recently is likely to remain so, they added.

Indications of a split was being rumoured in corporate circles when Ravi Marwaha, stepped down from the top post at Tata-IBM couple of months back. Tata IBM, which had gone through financial difficulties, started doing well only recently.

Tata group chairman Ratan Tata was quoted in a press release as saying that the decision was the outcome of an agreement between the Tatas and IBM.

IBM Asia-Pacific president John Joyce said that all existing contracts and other business arrangements with Tata-IBM and IBM Global Services would remain in force. Joyce said that IBM remained committed to its business partners, as well as existing and potential customers, to ensure that theopertations are not be affected in any way by the proposed reorganisation of the ownership.

Tata-IBM, which has been representing IBM since 1992, was set up as a 50:50 joint venture between IBM and the Tatas. It markets and supports IBM products, solutions and services in the country. The company also handles overall sales and marketing of IBM hardware in India.

IBM Global Services was set up as a joint venture in 1997 and works closely with Tata IBM to support its customers' services needs. IBM holds 80 per cent equity in the company, while the balance was divided evenly between Tata Industries and Tata IBM.

The company provides a range of IT services, including networking services, outsourcing, education, system integration, consulting, software development and hardware design.

IBM Global Services India will function under the IBM Global Services group, the fastest-growing segment of IBM's business having a revenue of $22.9 billion in revenue in 1996.