Tata Trusts conflict deepens as Noel, others block Mistry's reappointment
What's the story
Noel Tata, the chairman of Tata Trusts, along with Vice Chairmen Venu Srinivasan and Vijay Singh, have opposed the reappointment of businessman Mehli Mistry as a permanent trustee. The decision could potentially destabilize the philanthropic organizations controlling Tata Sons. Mistry is likely to legally challenge this decision in court. The three other trustees—former Citibank India CEO Pramit Jhaveri, Mumbai lawyer Darius Khambata, and Pune-based philanthropist Jehangir H.C. Jehangir—voted in favor of Mistry's reappointment.
Voting divide
Split vote marks a departure from recent consensus-driven approach
The split vote is a stark contrast to the recent consensus-driven approach.Last week, following Srinivasan's appointment as a lifelong trustee, four trustees under Mistry labeled the move a "procedural formality," pointing to their unanimous vote last October to secure permanent positions for themselves.Under the Trusts' rules, appointments and removals require unanimous consent.
Legal implications
Legal challenge likely, raising questions about future consensus
The current situation poses two immediate challenges for Noel, who took over as chairman of Tata Trusts on October 11, 2024. First, Mistry is likely to legally challenge the decision as a joint meeting of the Sir Ratan Tata Trust and the Sir Dorabji Tata Trust on October 17, 2024, had decided to make all trustees permanent. Second, the standoff raises questions about how these trusts will achieve consensus in the future.
Legal rights
Legal recourse within rights of trustee
A top Mumbai lawyer told Mint last week that legal recourse would be within the rights of a trustee who doesn't get reappointed. Senior Supreme Court lawyer H.P. Ranina said, "Hypothetically, if any trustee fails to get reappointed, then that means the other Trustees have violated the decisions taken on the October 17, 2024 board meeting." He added that such a trustee has the right to take legal action against Tata Trusts.
Background details
Mistry's ties to Ratan Tata and SP Group
Mistry joined the Tata Trusts board in 2022 as part of a leadership overhaul aimed at strengthening governance standards and aligning the Trusts more closely with Tata Group's strategic and charitable goals. A long-time confidant of Ratan Tata, his appointment reflected efforts to bring experienced voices into the organization's top decision-making body. Mistry's long association with the Shapoorji Pallonji (SP) family has also drawn attention over the years.