Why Tata Trusts is in turmoil
What's the story
A power struggle has erupted at Tata Trusts, drawing government attention and raising questions about governance at one of India's most influential business conglomerates. The conflict centers around board appointments and financial decisions, reminiscent of past disputes within the group. The situation has raised concerns over potential undue influence on Tata Sons, its holding company.
Intervention
Government's involvement in private corporate matter is rare
The government's involvement in this private corporate matter is rare. The next board meeting of Tata Trusts, scheduled for October 10, will focus solely on philanthropic activities and a ₹1,000 crore commitment. Insiders have stressed that the agenda is not related to ongoing disputes over Tata Sons' governance and board appointments.
Players
Current discord at Tata Trusts involves 7 key figures
The current discord at Tata Trusts involves seven key figures. They are Noel Tata, chairman of Tata Trusts and Tata International; N Chandrasekaran, chairman of Tata Sons; and Venu Srinivasan, a trustee of Tata Trusts. The opposing camp includes Darius Khambata, Jehangir H.C. Jehangir, Mehli Mistry (a long-time associate of the late Ratan Tata), and Pramit Jhaveri.
Dispute
Mistry Quartet denies allegations of undermining Noel's leadership
Sources close to Noel Tata have alleged that the Mistry Quartet wanted to act as a "super board," undermining his leadership. However, the trustees in this group have denied these allegations, calling them false and aimed at portraying them as villains. All four had voted in favor of Noel Tata's appointment as chairman last year after Ratan Tata's demise.
Issues
3 main issues fueling friction between camps
The friction between the two camps has been fueled by three main issues. These include Tata International's request for ₹1,000 crore from Tata Sons to reduce its debt; Noel Tata's proposal for a Deputy MD at Tata Sons; and the board appointment of Mehli Mistry, which was opposed by Noel but supported by the Mistry Quartet.
Tensions
Ousting Tata Sons nominee director sparks tensions
The ousting of former defense secretary Vijay Singh as a Tata Sons nominee director also sparked tensions. While Noel Tata and Venu Srinivasan opposed the decision, the Mistry Quartet supported it. This incident highlights deep divisions among trustees over board appointments and governance. The current tensions are reminiscent of past conflicts within the Tata Group, especially the public fallout between late Ratan Tata and Cyrus Mistry nearly a decade ago.