Internal Power Struggle Threatens Stability at Tata Trusts: Trustees Divided Over Board Appointments and Governance

New Delhi:

A significant power struggle has emerged within Tata Trusts, the entity that holds approximately 66 percent stake in Tata Sons and effectively controls India's most valuable conglomerate. The conflict centers around board appointments and governance issues, creating a notable division among trustees.

According to sources, the Trusts appears to be split into two factions. One group aligns with Noel Tata, who assumed the chairmanship following Ratan Tata's death. The opposing faction consists of four trustees led by Mehli Mistry, who maintains connections with the extended Shapoorji Pallonji family—owners of roughly 18.37 percent of Tata Sons.

Reports suggest Mehli Mistry feels excluded from critical decision-making processes within the organization.

Sources indicate the primary point of contention involves board positions at Tata Sons, the controlling entity of the 156-year-old conglomerate that oversees approximately 400 companies, including 30 publicly listed enterprises.

The dispute originated during a meeting of six trustees of Tata Trusts, the umbrella organization representing various charitable trusts including the Sir Dorabji Tata Trust and Sri Ratan Tata Trust.

The September 11 meeting was convened specifically to evaluate the reappointment of former defense secretary Vijay Singh as a nominee director on the Tata Sons board.

Tata Trusts comprises seven trustees, with Singh being among them. Singh abstained from the September 11 meeting as his nomination was under discussion.

Following Ratan Tata's passing in October 2024, Tata Trusts implemented a policy requiring annual reappointment of nominee directors on the Tata Sons board once they reach 75 years of age. During the September meeting, Trusts Chairman Noel Tata and Venu Srinivasan (chairman emeritus of TVS Group) proposed the reappointment of 77-year-old Vijay Singh, who has served as a director since 2012 and trustee since 2018.

However, the four other trustees—Mehli Mistry, Pramit Jhaveri, Jehangir HC Jehangir, and Darius Khambata—opposed the reappointment, resulting in the resolution's rejection.

Following this rejection, the four trustees attempted to nominate Mehli Mistry to the Tata Sons board. This proposal met opposition from Noel Tata and Venu Srinivasan, who emphasized the necessity for a transparent process aligned with Tata's core values. Subsequently, Vijay Singh voluntarily resigned from his position on the Tata Sons board.

Another Tata Trusts Board meeting is scheduled for October 10, though the agenda remains undisclosed.

When approached for comment, representatives from Tata Trusts, Tata Sons, and Venu Srinivasan declined to provide statements.

Attempts to obtain comments from Mehli Mistry were unsuccessful, with calls and messages remaining unanswered.

Sources suggest that as the infighting among Tata Trusts trustees threatens to impact the functioning of the over $180 billion conglomerate, government intervention may become necessary.

"Given the Tata Group's significant importance to the country's economy, the primary question facing the government is whether it can permit an individual to gain control. The trustees' conflict directly affects Tata Sons," one source explained.

This development coincides with the expiration of the Reserve Bank of India's deadline for Tata Sons to go public. Classified as an upper-layer shadow bank, Tata Sons' listing deadline passed on September 30, though the company has applied "for voluntary surrender of the Certificate of Registration as a CIC (Core Investment Company) and to continue as an 'unregistered CIC'." The RBI is currently examining this application.

Some within the group believe that the four trustees led by Mehli Mistry are attempting to undermine Noel Tata's leadership position within Tata Trusts.

Another source noted that compared to the potential threat of the Tata Group falling under the control of a few individuals, the matter of listing Tata Sons under the RBI mandate currently holds secondary importance.