How Tata Sons Board Seats Became a Battleground Among Trustees | Explained

India’s most valuable conglomerate, Tata Sons, finds itself at a critical juncture once again. Amid regulatory uncertainty over whether the company will have to list or not, Tata Sons is facing an internal rift within its governing body, the Tata Trusts.

The 156-year-old group — whose business empire spans around 400 companies, including 30 listed on the BSE and NSE — is controlled by a group of Tata family trusts. Its trustees now appear to be locked in a tussle over seats on the Tata Sons board. At the heart of this battle is the power to make key decisions at the holding company, which has a market capitalisation of ₹27.85 lakh crore ($313.9 billion) as of March 2024.

This dispute has already led to the resignation of former Defence Secretary of India, Vijay Singh, from the board and has reportedly even prompted government intervention. Two cabinet ministers are expected to meet key Tata Group executives this week.

All eyes are now on the Tata Trusts’ next meeting on October 10. 

How the Board Seat Dispute Arose

The current 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 Sir Ratan Tata Trust, which together control about 65% of Tata Sons. The meeting, held on September 11, was convened to consider the reappointment of Vijay Singh as a nominee director on the Tata Sons board. There are seven trustees of the Tata Trusts in total, including Singh.

However, Singh did not attend the meeting, as his nomination was on the agenda.

The Trusts, after the death of the late patriarch Ratan Tata on October 9, 2024, had decided that nominee directors on the Tata Sons board must be reappointed annually once they turn 75.

Singh, who has held the role since 2012 and has been a trustee of the Tata Trusts since 2018, is 77 and was due for reappointment at this meeting.

The reappointment resolution was reportedly proposed by Trusts Chairman Noel Tata and Venu Srinivasan (Chairman Emeritus of TVS Group). Both are also nominee directors on the Tata Sons board.

However, the remaining four members, Mehli Mistry, Pramit Jhaveri, Jehangir HC Jehangir, and Darius Khambata, opposed the move. Since they constituted a majority, the resolution was rejected.

Following this, the four trustees reportedly tried to propose the nomination of Mehli Mistry as a nominee to the Tata Sons board. Tata and Srinivasan resisted the move, reportedly saying that such appointments must follow a transparent process consistent with Tata’s values and institutional reputation.

After the meeting, Singh voluntarily stepped down from the Tata Sons board.

Why Board Seats Are Important for Tata Family

Tata Trusts (before the resignation of Vijay Singh) had three nominee directors on Tata Sons' board. These directors are key to every major decision of Tata Group companies, which include Tata Consultancy Services (TCS), Tata Steel, Tata Motors, Tata Power, Indian Hotels Company, and Tata Consumer Products, among others. Criteria for the same has been outlined in the Articles of Association of Tata Sons Limited. 

While the Articles of Association of the group is not publicly available, a 2021 Supreme Court judgment in Tata Sons Pvt Ltd vs Cyrus Investments Pvt Ltd case provides some of the powers nominee directors hold. 

Under Article 104B(b) of Tata Sons’ Articles of Association, the Sir Dorabji Tata Trust and Sir Ratan Tata Trust have a standing right to nominate one-third of the company’s directors, a right exercised whenever the board is formed or a vacancy arises.

In addition, Article 121 lists several “reserved matters," such as changes in shareholding, alteration of the Articles, appointment or removal of the chairman, sale of major assets, or entry into new business areas, that require the affirmative consent of the Trusts’ nominee directors.

Among these is a key financial safeguard preventing Tata Sons from making any investment exceeding ₹100 crore without their approval. The Supreme Court characterised these provisions as protective rights intended to ensure prudent governance and oversight.

According to recent reports, another point of contention involves the flow of information from the Tata Sons board to the Tata Trusts. The four trustees, who are not on the Tata Sons board, have alleged that nominee directors, who serve as the primary link between the two bodies, have not been sharing complete updates.

This concern has grown in recent months, with at least one trustee alleging that the flow of information has been deliberately restricted, the Economic Times reported.

Noel Tata’s Power Struggle

Since his appointment as the Chairman of Tata Trusts, Noel Tata has reportedly tried to gain control of the group and trusts, which reports say has not sat well with some trustees.

According to a Moneycontrol report, his half-brother Ratan Tata was known for using his "sweeping authority" and rarely faced challenges. But Noel has "so far not been able to consolidate similar authority," the report claimed. Though he bears the family name and was unanimously chosen to succeed Ratan Tata, the internal dynamics of the Trusts have shifted. Unlike his predecessor, Noel now faces closer scrutiny from his fellow trustees.

Currently, the Tata Sons board has three vacancies to fill.

It was earlier reported that at least two members of the Tata Sons board, former Jaguar Land Rover CEO Ralf Speth and industrialist Ajay Piramal, are set to step down in the coming months upon reaching the mandatory retirement age of 70. Both joined the board in 2016. Meanwhile, independent director Leo Puri resigned in April.

With Vijay Singh's resignation, vacant posts are expected to be four.

Barring the above members, the board also includes Natarajan Chandrasekaran (Executive Chairman), Noel N. Tata, Venu Srinivasan, Harish Manwani (Independent Director), and Saurabh Agrawal (Group CFO), according to the Tata Sons annual report.

The report claims that Kotak Mahindra Bank's founder and director Uday Kotak may be invited to join the board. Bahram Vakil, cofounder of AZB & Partners, who joined the board of Tata Investment Corp in March, is also being considered for the job. Further, Tata is expected to induct its steel unit chief TV Narendran onto its board.

A New Phase of an Age-Old Feud

At the centre of this opposition lies the minority shareholding of Tata Sons.

Tata Sons is majorly (65.30%) owned by a group of trusts. The JRD Tata Trust and RD Tata Trust hold 4.01% and 2.19%, respectively. The Sir Dorabji Tata Trust and Sir Ratan Tata Trust control 27.98% and 23.56%, while the Tata Education Trust and Tata Social Welfare Trust each hold 3.73%.

Other stakeholders in Tata Sons include, the Shapoorji Pallonji Group with a 18.38% stake, held via Cyrus Investments Pvt Ltd. and Sterling Investment Corporation Pvt Ltd. (each holding 9.19%). Remaining 16.32% stakes are held by other non-institutional investors.

Shapoorji Pallonji Group's promoters, the Mistry family, fought a bitter battle with the Tatas in the late 2010s, after the ouster of late Cyrus Mistry as the Chairman of Tata Sons. The battle brought forward many faultlines of the more-than-a-century-old partnership.

While the 2021 Supreme Court judgment in this feud, which affirmed Tata family rights to the group, was expected to be a closing of the battle, a new front opened in 2022 as RBI designated Tata Sons as an Upper Layer Core Investment Company (UL-CIC). This meant the 156-year-old company was mandated to get listed on stock exchanges within three years of the classification. The deadline for the same expired on September 30. 

The listing would have given an opportunity to the SP group to exit from Tata Sons. While Tata Group was mulling plans to avoid listing, the SP group reportedly wrote to RBI demanding no exemption from the listing.

For SP group, which operates a capital-heavy EPC business, liquidity of Tata Sons stakes became even more important after COVID-19, which raised their debt levels.

In its annual report for FY25, Tata Sons said that it has asked RBI to remove it from the UL-CIC category. The central bank is yet to take a call on the request. In the recent MPC, governor Sanjay Malhotra has said that the company can continue to do its business till they take a call on the mandate.

For SP group, Tata Trust has asked the Group chairman N. Chandrasekaran to talk with the SP group to provide them a possible exit route.

While the talks were still ongoing, the recent dissent has created a new trouble for the group.