Tata Trusts Boardroom Battle: Tata Trusts faces internal strife as Noel Tata and N Chandrasekaran meet Amit Shah and Nirmala Sitharaman over governance disputes.
Tata Trusts Infighting: The rift within Tata Trusts, the principal shareholder of Tata Sons, has reached the corridors of power. Sources close to the Tata Group told CNBC-TV18 that the government cannot be a silent spectator to the coup attempt by four trustees of Tata Trusts. They said the government has taken note of the widening rift within Tata Trusts and is prepared to intervene if necessary to prevent instability in one of India’s most influential conglomerates.
“The government cannot be a silent spectator to the coup attempt by four trustees of Tata Trusts,” a source close to Tata Group told CNBC-TV18, adding that the Centre is “fully seized of the matter” and is closely monitoring developments.
The Tata Trusts board is scheduled to meet on October 10, even as government officials engage with both sides to defuse the crisis. According to CNBC-TV18, sources close to the Tata group warned the conflict could spill over into Tata Sons’ functioning if not swiftly resolved.
Importantly, the sources close to the Tata group said the October 10 meeting “has nothing to do with the recent tensions”.
On Tuesday evening, Tata Trusts Chairman Noel Tata and Tata Sons Chairman N Chandrasekaran, along with Tata Trusts Vice-Chairman Venu Srinivasan and trustee Darius Khambata, arrived together at Home Minister Amit Shah’s residence for discussions. Finance Minister Sitharaman also joined the meeting, which came against the backdrop of mounting tensions among trustees over board appointments and governance structures, the issues that threaten to impact the functioning of the over $180-billion Tata Group.
What’s The Issue?
The meeting comes against the backdrop of infighting among trustees of Tata Trusts, a key shareholder in Tata Sons, over board appointments and control mechanisms that adversely affect the functioning of the over $180-billion conglomerate.
A faction of four trustees – Darius Khambata, Jehangir HC Jehangir, Pramit Jhaveri, and Mehli Mistry – has reportedly been operating as a “super board”, undermining Noel Tata’s authority and creating friction within the Trusts. This internal power struggle has drawn the attention of the government due to its potential impact on Tata Sons, the holding company that controls the 156-year-old group spanning around 400 companies, including 30 listed firms.
What’s Behind the Tensions?
CNBC-TV18 reported that some of the key flashpoints that have led to tensions include an equity infusion by Tata Sons into Tata International, which is chaired by Noel Tata. The proposed Rs 1,000-crore infusion was aimed at helping Tata International tide over its losses. Although the proposal was eventually cleared, the move became a source of disagreement among trustees.
Differences also emerged over Noel Tata’s suggestion to create a deputy managing director position at Tata Sons, which some trustees reportedly opposed. In contrast, other trustees are said to have proposed the appointment of Mehli Mistry to the Tata Sons board, an idea opposed by Noel Tata and his allies.