Power struggle in Tata Trusts: Trustees clash over board appointments

Tata Trusts, which exerts decisive influence over India's most valuable conglomerate through its about 66 per cent stake of Tata Sons, finds itself in the midst of infighting among its trustees over board appointment and governance issues.

Sources said the Trusts is said to be vertically split with one section aligned with Noel Tata, who was appointed chairman of the Trusts following the death of Ratan Tata. The other grouping of four trustees is led by Mehli Mistry, who has ties with the extended Shapoorji Pallonji family, which owns about 18.37 per cent of Tata Sons.

Mehli reportedly feels he has been kept out of the loop on key matters.

Sources said the flashpoint is said to be board seats at Tata Sons, which controls the 156-year-old group that spans around 400 companies, including 30 listed firms.

The dispute has its roots in a meeting of six trustees of the Tata Trusts, the umbrella group representing several charitable trusts, including the Sir Dorabji Tata Trust and Sri Ratan Tata Trust.

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

There are seven trustees of the Tata Trusts, including Singh. Singh did not attend the September 11 meeting as his nomination was on the agenda.

Following the death of Ratan Tata in October 2024, Tata Trusts introduced a policy requiring annual reappointment of nominee directors on the Tata Sons board once they turn 75. At the September 11 meeting, the reappointment of 77-year-old Vijay Singh - a director since 2012 and trustee since 2018 - was proposed by Trusts Chairman Noel Tata and Venu Srinivasan (chairman emeritus of TVS Group).

However, the four other trustees - Mehli Mistry, Pramit Jhaveri, Jehangir HC Jehangir, and Darius Khambata - opposed the move, leading to the resolution's rejection.

Following the rejection, the four trustees sought to nominate Mehli Mistry to the Tata Sons board, but Noel Tata and Venu Srinivasan opposed the move, emphasising the need for a transparent process aligned with Tata’s values. Subsequently, Vijay Singh voluntarily resigned from the Tata Sons board.

Another meeting of the Board of Tata Trusts is scheduled for October 10, but the agenda is not known.

When contacted, Tata Trusts, Tata Sons and Venu Srinivasan declined to comment.

Comments from Mehli Mistry could not be obtained as calls and messages remained unanswered.

Sources said that with the infighting among trustees of Tata Trusts threatening to impact the functioning of the over USD 180 billion conglomerate, the intervention of the government has become necessary.

"The primary question in front of the government, considering how significant and important the Tata Group is to the country's economy, is whether it can let an individual take control of it. The infighting among trustees of Tata Trusts has an impact on Tata Sons," a source said.

The development comes at a time when the deadline set by the RBI for public listing of Tata Sons, classified as an upper-layer shadow bank, expired on September 30, although the company has applied for "for voluntary surrender of the Certificate of Registration as a CIC (Core Investment Company) and to continue as an 'unregistered CIC'. The application is under examination by the RBI.

Some within the group feel that the four trustees led by Mehli Mistry have been trying to undermine Noel Tata's leadership in Tata Trusts.

The matter of listing Tata Sons under the RBI mandate is secondary at the moment compared to the threat of the Tata Group falling into the hands of a few individuals, another source noted.

Tata Trusts Chairman Noel Tata and Tata Sons Chairman N Chandrasekaran, along with some trustees of the Tata Trusts are likely to meet union cabinet ministers, reports say.