Tata Sons' power struggle reaches govt corridors

In a dramatic escalation of the ongoing tussle at the helm of the Tata Group, Tata Trusts Chairman Noel Tata and Tata Sons Chairman N. Chandrasekaran met Home Minister Amit Shah and Finance Minister Nirmala Sitharaman on Tuesday to brief them on the internal revolt brewing within the Tata Trusts board. The ministers were reportedly apprised of how the rift among trustees could impact the functioning and stability of nearly 100 Tata Group companies operating across six continents.

According to sources, the government fears that factionalism within Tata Trusts — the body controlling 66% of Tata Sons — could dent investor confidence and tarnish the reputation of Indian companies globally. Trustees Darius Khambatta and Venu Srinivasan are also believed to have met the ministers to discuss the issue.

“The situation could become a long-term governance problem. However, removing dissenting trustees isn’t a practical solution,” said a source familiar with the developments. The executives also discussed the long-pending issue of Tata Sons’ proposed listing and the need for unity within the Trusts.

The current friction surfaced soon after Noel Tata’s elevation as chairman of Tata Trusts following Ratan Tata’s passing. Four trustees — Mehli Mistry, Pramit Jhaveri, Jehangir Jehangir, and Darius Khambatta — reportedly opposed the reappointment of nominee director Vijay Singh to the Tata Sons board, instead seeking to replace him with one of their own. Singh’s subsequent resignation was seen as part of an effort by the dissenting bloc to consolidate influence over the holding company.

Noel Tata and Chandrasekaran are said to have conveyed to the ministers that maintaining Tata Sons as a private company is critical to keeping the conglomerate’s diverse businesses under a unified structure. Many Tata firms are run by independent managements, and the group lacks majority control in several key companies. “A similar resistance was seen in group companies when Ratan Tata became chairman in the early 1990s,” a source recalled.

Officials view the turmoil as a serious risk to corporate governance within one of India’s most systemically important business groups. The meeting with the ministers comes just ahead of the Tata Trusts board meeting on October 10, which is expected to review its September-quarter performance.

The board is now sharply divided between Noel Tata’s camp and a powerful dissenting group led by trustee Mehli Mistry — cousin of the late Cyrus Mistry. Sources said Mistry feels excluded from key decisions, which has become the latest flashpoint. The Shapoorji Pallonji family continues to hold an 18.37% stake in Tata Sons.

Amid growing discord, Noel Tata’s camp is reportedly working on a set of governance reforms aimed at restoring stability. Proposals under consideration include expanding the number of trustees, setting a retirement age for board members, and granting the chairman greater authority to take decisions on appointments and restructuring, said sources.

Tata Trusts’ nominee directors on Tata Sons board wield veto power under Article 121 of Tata Sons’ Articles of Association, allowing them to block key resolutions on capital allocation, acquisitions, and senior executive appointments.

The failed attempt to replace Vijay Singh with Mehli Mistry was viewed as an effort by the dissenting faction to leverage this veto power — a move firmly resisted by Noel Tata and vice-chairman Venu Srinivasan in defence of established procedures and the Tata Group’s core governance values. Since Noel Tata’s appointment, the Trusts have begun meeting before every Tata Sons board meeting to align on strategy.

Currently, Tata Sons’ board includes two nominee directors from the Trusts — Noel Tata and Venu Srinivasan. A search is underway, reportedly via a professional firm, to identify another nominee director. Vacancies also remain for seats previously held by Ralph Speth, Ajay Piramal, and Leo Puri.