Turmoil at Tata Trusts? Appointment of nominee director to Tata Sons board leads to acrimony, says report

A key resolution brought after the demise of Ratan Tata, and the appointment of Noel Tata, has reportedly led to acrimony over the appointment of a nominee director on the board of Tata Sons. As per a report, tempers flared in a meeting of Tata Trusts over differences on how charities are meant to exercise control.

According to a report in The Economic Times, after the appointment of Noel Tata, it was decided that Tata Trusts-nominated directors on Tata Sons’ board would have to be renewed every year after they attain the age of 75 years. This meant that Vijay Singh, 77, part of the board and nominee director since 2013, now needed to be reappointed every year to the Tata Sons board. 

As per the report, four trustees – Mehli Mistry, Pramit Jhaveri, Jehangir Jehangir and Darius Khambata – opposed Singh’s reappointment, who then subsequently tendered his resignation. Noel Tata and Venu Srinivasan who are nominee directors were the other trustees present. 

Differences emerged when the four dissenting trustees tried to appoint one of them – Mehli Mistry – to the Tata Sons’ board, which was opposed by Noel Tata and Venu Srinivasan. They insisted on following due process in a manner befitting Tata values. 

This is pertinent because the nominee directors hold veto powers on key decisions, as per the report. People in the know told the daily that dismissing one nominee director and appointing another was a move to seize power in Tata Trusts and thereby Tata Sons. Such decisions are usually made unanimously. 

For now Tata Sons will have two Tata Trusts-nominated directors on the board till a solution is worked out. It might also approach a professional firm to seek and shortlist candidates. 

As per the report, apart from the vacancy of the nominee director, Tata Sons board also needs to fill the vacancies caused by the departures of Ralph Speth, Ajay Piramal and Leo Puri.