Crisis at Tata Trusts: What’s tearing India’s most powerful board apart

The directors of Tata Trusts are likely to convene in Mumbai today in what is shaping up to be a pivotal meeting for the future of the Tata Group. The gathering comes after the Centre quietly intervened this week to ease mounting tensions within the powerful philanthropic body that controls two-thirds of Tata Sons, the $300 billion holding company behind India’s most iconic conglomerate.

According to Bloomberg, government officials held a closed-door meeting with representatives from Tata Trusts and Tata Sons on Wednesday. The message from Delhi: resolve the boardroom fight and avoid disruptions to one of India’s most strategically important corporate entities.

What caused the rift?

The rift exploded last month when some Tata Trusts directors removed former defense secretar Vijay Singh as a nominee director from the Tata Sons board and attempted to oust Venu Srinivasan, another Tata Trusts-nominated director. Both are seen as close to Noel Tata, who chairs Tata Trusts.

Friday’s meeting is the first formal one since that acrimony surfaced — and it happens one year and a day after Ratan Tata’s death, underscoring the leadership vacuum his absence has left.

Tata Trusts and Tata Sons have not commented on the Bloomberg report. Business Today was unable to independently verify the claims attributed to individuals familiar with the matter.

Ratan Tata’s long-standing strategy was to split the leadership of Tata Trusts and Tata Sons to avoid concentration of power. But that structure now appears to be fraying, with the seven trustees split into two factions.

One faction includes Noel Tata, Singh, and Srinivasan — all of whom have seats on the Tata Sons board. The other includes Mehli Mistry, Pramit Jhaveri, Darius Khambata, and Jehangir H.C. Jehangir, none of whom are on the board. This group reportedly has accused the directors on the Tata Sons board of withholding key information.

IPO anxiety and the SP Group exit

At the center of the split is a debate over whether Tata Sons should go public. Bloomberg reported that the Reserve Bank of India classified Tata Sons as an “upper-layer” NBFC — a designation that mandates a listing. Some trustees fear an IPO would weaken Tata Trusts’ veto rights and shift power to minority shareholders, particularly the Shapoorji Pallonji (SP) Group, which owns 18.37% of Tata Sons.

An IPO would also subject Tata Sons to stricter governance norms, including “majority of minority” voting — which could amplify SP Group’s influence.

While no decision is imminent, trustees have asked Tata Sons Chairman N. Chandrasekaran to explore a peaceful exit strategy for the SP Group, which is under financial strain and eager to sell its stake. Bloomberg previously reported the SP Group is considering selling its shares back to Tata Sons to ease its debt burden.

What to expect on Friday

According to Mint, Friday’s meeting could set the tone for the Trusts’ direction and ability to function cohesively. While no immediate flashpoints are expected, insiders say a rapprochement may be possible — if both sides prioritize the group’s stability over internal rivalries.