Tata Trusts vice chairmen hit back at Darius Khambata over Tata Sons listing, governance: Report

A sharp rift has emerged within the upper echelons of the Tata Group after Tata Trusts vice chairmen Vijay Singh and Venu Srinivasan issued a point-by-point rebuttal to outgoing trustee Darius Khambata, challenging his critique of Tata Sons’ regulatory dealings and governance, according to a report by The Economic Times.

In a November 11 reply to Khambata’s letter declining reappointment, Singh and Srinivasan questioned whether his real concern was preserving the Tata model or maintaining the current Trust leadership's control over Tata Sons, as per the ET report. While acknowledging his sincerity, they termed his account "incomplete in several material respects", noting that true independence means holding allies to the same standard as opponents.

The clash follows Khambata’s November 2 letter to Trusts chairman Noel Tata, which faulted Tata Sons' engagement with the Reserve Bank of India (RBI), opposed the holding company's proposed listing, and questioned trustee independence.

Singh rejected claims that RBI discussions — which began in 2023 and led to debt repayment and a March 2024 deregistration bid — were inadequate. Trustees were kept informed throughout without objection from Khambata, The Economic Times reported.

Following a two-year review, the RBI ruled that Tata Sons remains a systemically significant non-banking financial company (NBFC) subject to mandatory listing. Singh called this a regulator's verdict rather than a failure of advocacy, adding that seeking preferential treatment would violate the Tata ethos.

Dismissing Khambata's warning that listing poses an existential threat, the vice chairmen pointed to foundation-anchored firms like Novo Nordisk, Hershey, Lundbeck, and Demant, alongside Tata Consultancy Services (TCS).

Listed group firms — including TCS, Tata Steel, Tata Power, and Tata Motors — have consistently pursued long-gestation bets such as the Jaguar Land Rover turnaround and electric vehicle leadership, they argued. Disclosure brings discipline without limiting vision, and a listing would not cause a "decoupling," as the Trusts would remain shareholders with dividends and philanthropy intact, the ET report added.

Invoking JRD Tata's "Whatever India needs" principle, they said that national service requires respecting laws and institutions even when regulatory rulings are unwelcome. Because the Trusts are tax-exempt charities, making control an end in itself raises questions over trustees' fiduciary duties and tax-exempt status, they warned.

Singh also rejected Khambata's reading of the Supreme Court's Tata versus Mistry judgment, noting that upholding Tata Sons' Articles of Association did not extinguish a director's fiduciary duty to the company or turn Trust nominees into delegates bound to vote the Trusts' line.