Following his reappointment to the board of the Tata Trusts, Venu Srinivasan emailed his fellow trustees on October 21. The mail read: “My dear fellow trustees, thank you very much for the confidence reposed in me, and for the kind words that have been expressed. I sincerely, hope we will now work harmoniously.”
Fellow trustee Mehli Mistry, immediately responded: Dear Venu, it has always been our intention to work harmoniously together! The only problem earlier, was the lack of required information requested by us, which you all nominated directors have agreed to provide. We must bury the past, respect each other and move forward as a team unanimously! That’s what Ratan would have expected to do.”
Even as it indicates the trustees’ search for harmonious functioning, this correspondence sums up the drama at Tata Trusts that began on September 11 when the reappointment of Vijay Singh to the Tata Sons Pvt. Ltd. (TSPL) board was opposed by four trustees — Mehli Mistry, Darius Khambatta, Jehangir H.C. Jehangir and Pramit Jhaveri. After a series of meetings that businessline had with protagonists from both camps in Mumbai recently it is clear that this is not a battle of egos or personalities though one or the other trustee may not like the persona of another.
The core issue appears to be flow of information from the trustees nominated to the Tata Sons board back to the other trustees. The underlying trust (no pun intended) seems to have given way as the camp comprising the four trustees named above alleges that information has not been shared by the trustees nominated to the TSPL board, namely Noel Tata, Venu Srinivasan and Vijay Singh (he was a nominee until September 11).
They narrate instances of resolutions passed in the TSPL board that were not brought back to the Trust board as provided in Article 121 A of TSPL’s Articles of Association. The said Article was introduced in 2014 and stipulates a range of actions of TSPL board that require affirmative vote by a majority of the Trust nominees (Article 121). The examples quoted range from the 3.8 billion euro acquisition of Italian commercial vehicle manufacturer IVECO by Tata Motors, where the trustees were informed towards the end of the deal, to the more contentious one where the TSPL board approved funding of ₹1,000 crore to Tata International Ltd., a company of where Noel Tata is chairman, in April.
Also read: Tata Trusts reappoints Venu Srinivasan for life; focus shifts to Mehli Mistry amid internal rifts
The group ranged against Mr. Tata hints at a conflict of interest here as Tata wears three hats — chairman of the trusts, its nominee on the board of TSPL and chairman of four group companies, namely Tata International, Trent, Tata Investment Corporation and Voltas. In addition, he’s vice-chairman of Tata Steel and Titan. “How can you as the owner (representative of Tata Trusts) sitting on the board (TSPL) vote as director along with the board on a ₹1,000 crore funding resolution related to a company (Tata International) where you’re chairman and also approve it as a trust nominee?,” asks a person speaking for a trustee.
Sources close to Noel Tata however dismiss this. “They want every proposal over ₹100 crore to be taken back to them for approval, which is not necessary,” they aver. And according to them, if at all there is a conflict of interest, it is in Mehli Mistry’s business dealings with Tata Power (he manages their logistics), while also being listed as a promoter of the company by virtue of his position as trustee on the Tata Trusts. This is violative of related party provisions in law, they allege.
Ironically, Mehli Mistry was the one who had proposed and pushed for the appointment of Noel Tata as chairman of the trusts to replace Ratan Tata upon the latter’s demise a year ago, according to a source. This was against opposition from a fellow trustee who wanted the position to be kept vacant. Story goes that this trustee hosted a dinner for three other trustees the day before the crucial trust board meeting where he persuaded them not to appoint Noel Tata. This move failed after Mehli Mistry, who was part of the dinner, proposed Noel Tata’s name for chairmanship in the board meeting the next day. Ask Mistry’s camp why he did that and the answer is: “The Tata Trusts have to remain with a Tata!” There was also the worry that an empty chair could attract unwanted characters from outside.
Sources close to Mr. Mistry underline that the trustees are even now not against Mr. Tata but they’re sore about “lack of transparency” from him. “There is no issue between individuals on the trust board. It is an issue of issues,” said a person who did not want to be identified.
This person also complains that when the crucial issue of IPO was discussed in the TSPL board, the information was not shared with the trustees. “We asked but were told that that ‘we’re not at liberty’ to share with you,” says the source. This response did not help because Tata is related by marriage to the Shapoorji Pallonji (SP) group which has been pushing for a TSPL IPO.
The trustees then sought a meeting with N. Chandrasekaran through the three Trust nominees on the TSPL board but that did not happen until one of the other four, understood to be Jehangir H.C. Jehangir, approached Mr. Chandrasekaran with a request for an update. The latter immediately made a two hour presentation over dinner to all the trustees with full transparency including his vision for the group. Impressed by the presentation, Mehli Mistry is supposed to have mailed the other trustees the very next morning with a proposal to nominate Mr. Chandrasekaran for a third term as Chairman of TSPL. This was followed up with a unanimous resolution in the next trust board meeting. The Trusts also resolved that an IPO of TSPL was not in the best interests of the group and Mr. Chandrasekaran was asked to engage with the SP group on the subject.
If there is one issue which both camps agree upon, it is on whether or not Tata Sons Pvt. Ltd (TSPL) should go public. The two sides are unanimous that an IPO of TSPL is not in the interests of both the group and the trusts.
“Why should we bail out the SP group now? Did they ask us before running up a debt of ₹50,000 crore? And where has the money gone?,” asked a person aligned with Noel Tata. When businessline queried about his personal relations, the person shot back saying that it had no impact on his decision. The feeling is that the philanthropic activities of the trusts and the group will suffer if public shareholders enter the equation.
“When the telecom business folded up, the entire ₹40,000-50,000 crore debt was discharged by TSPL though the business was housed in a separate company. We could’ve asked the banks to take a haircut but we repaid every rupee. That’s the Tata ethos. Would this have been possible had TSPL been listed? Would the public shareholders allow this?,” asks this person.
The response from the other four trustees is the same. The best interests of the group and the trusts will be served only by keeping TSPL private, they say, adding that neither TSPL nor the trusts should be pressured by the financial problems of a particular shareholder. They also point to how the group is now into sensitive and nationally important businesses such as semiconductors and manufacture of defence equipment which need to be kept out of the public eye. These are also long gestation projects that need continuous financial support with returns in the distant future. The implication is that this will not be possible if TSPL is listed as public shareholders would demand quick returns.
Chandra emerges stronger
Even as the trustees quarrel among themselves, if there is one winner it is N. Chandrasekaran. Sources from both camps have nothing but praise for him with one pointing out that he’s taken the group profits from ₹850 crore (when he took over) to about ₹27,000 crore now. They also point to his forays into new generation businesses such as electronics and semiconductors to support their decision to give him a third term. These businesses need to be nurtured and he’s the best placed to do it, according to them.
Ask them whose side is Mr. Chandrasekaran on now and they’re both circumspect in answer. “We don’t know,” is the reply that comes with some wariness built in. Indeed, given his perceived closeness to the powers-that-be in New Delhi, the two sides would rather leave him alone from their disagreeement. Chandrasekaran was among the four who met Union Home Minister Amit Shah and Finance Minister Nirmala Sitharaman a few days ago. The others were Noel Tata, Venu Srinivasan and Darius Khambatta.
Interestingly, though it was put out that the government had summoned them, sources close to the four trustees ranged against Noel Tata say that the meeting was arranged by Mr. Chandrasekaran at the former’s request.
(The writer is Editor, The Hindu businessline)
Published – October 23, 2025 06:04 am IST
