For economy’s sake, Tata house must be in order

The governance rift among the trustees in Tata Trusts surfaced in mid-September, less than a year after the passing of former Tata Trusts chairman Ratan Tata. Considering the sheer breadth of sectors it operates in from steel to auto, software, retail and semiconductors, another power struggle at the conglomerate could have far-reaching ramifications.

The markets’ concern is straightforward: prolonged infighting within Tata Trusts could paralyse decision-making at Tata Sons. With 29 publicly listed Tata firms collectively accounting for over $328 billion in market capitalisation and $180 billion in revenue, a governance freeze at the top could ripple across the markets and even the broader Indian economy.

At the October 11, 2024 meeting, trustees led by Mehli Mistry appointed Noel Tata as chairman of the charities, and discussed extending the tenure of trustees for life. During the October 17, 2024 meeting, Noel Tata was made a nominee director of Tata Trusts on the board of Tata Sons, and the trustees decided that nominee directors over the age of 75 would be subject to an annual review.

The October 17 resolution also stated that once a trustee’s tenure expired, the same trustee could be reappointed without any limit on the duration of such reappointments. This clause later triggered friction at the September 11, 2025 meeting, when a majority voted against continuing 77-year-old nominee director Vijay Singh on Tata Sons’ board, leading to his resignation.

In a recent blow to the truce, Tata Trusts chairman Noel Tata and two other powerful trustees considered close to him blocked the reappointment of late Ratan Tata’s close associate and businessman Mehli Mistry as trustee, deepening the rift at the philanthropic arm that controls the holding company of Tata Group.

Surprisingly though, last week, the CEO of Tata Trusts had issued a circular to other trustees seeking Mistry’s reappointment to the Sir Ratan Tata Trust (SRTT), the Sir Dorabji Tata Trust (SDTT), and the Bai Hirabai Jamsetji Tata Navsari Charitable Institution.

Noel Tata and Mehli Mistry are two power centres in the Tata Trusts, which control a majority stake in the holding company of the Tata Group. Mistry, who is likely to challenge the move in court on the ground that a joint meeting of the Sir Ratan Tata Trust and the Sir Dorabji Tata Trust on October 17 last year , within days of the death of Ratan Tata , had agreed to make all trustees permanent, has maintained a stoic silence.

Legal experts have opined that according to the minutes of the joint meeting of the trustees held on October 17, 2024, it was resolved that on the expiry of the tenure of any trustee, the trustee would be reappointed by the concerned trust without any limit being attached to the period of tenure.

In addition, as per the resolution, any trustee who chose to vote otherwise would be in ‘breach of their commitment’ and is not fit and proper to serve on Tata Trusts by such conduct. As corporate India awaits Mistry’s next move, the general feeling of India incorporated as well as the government of India is that good sense prevails and the disagreement between the two power centers are resolved within the Tata group to prevent rami fications on the robust Indian economy.