New Delhi:
The power struggle in the Tata Trusts – the nonprofit and philanthropic group that collectively owns about 66 per cent of Tata Sons – seemed set to explode Tuesday after Noel Tata, Venu Srinivasan, and Vijay Singh reportedly voted against extending Mehli Mistry’s trusteeship.
Despite leading a challenge, Mistry may have expected that favor to be returned when he voted last week to approve Srinivasan’s life trusteeship. Sources told NDTV Profit he may now pursue legal options. A resolution passed last year granted existing trustees a life term.
The resolution, the text of which was accessed by NDTV Profit, said “… on the expiry of tenure of any trustee, that trustee will be re-appointed… without any limit being attached to period of tenure… in accordance with the law”.
However, sources told news agency PTI that trusteeship renewals “are required to be unanimous, per past practice… (but) renewal for life requires unanimous approval”, suggesting Mistry’s appointment as a trustee-for-life needed an active sign-off from other board members.
If the vote to remove Mistry is carried out, he will be kicked off the board. This could end a disagreement that many analysts believed could threaten the stability of the Tata Group, a corporate behemoth whose listed entities are estimated to have a total market capitalisation of Rs 25 lakh crore. That rift could impact strategic decisions at Tata Sons, which is the Tata Group’s principal holding company, and emerged at a September 11 board meet to consider the reappointment of ex-Defence Secretary Vijay Singh as a nominee-director to the former’s board.
The trustee Srinivasan, who is also Chairman Emeritus of the TVS Group, and Trustee Noel Tata proposed that his term be extended. But four others – Mistry, Pramit Jhaveri, Jehangir HC Jehangir, and Darius Khambata – opposed it, leading to the resolution’s rejection.
All of this played out amid whispers Mistry (and his camp) are trying to undermine Noel Tata, who was made Chairman after Ratan Tata’s death in October last year.
Mistry’s camp, sources indicated, also claimed exclusion from vital decision-making and advocates for increased transparency and reforms in corporate governance.
Today marks the end of Mistry’s five-year term.
Before renewing Srinivasan’s trusteeship, the board also renewed N Chandrasekaran’s term as Tata Sons Chairman. He will continue in that position till 2032, NDTV Profit was told.
The Tata Trusts split and how it would affect the group were brought to the attention of the highest levels of government. Top Tata executives, including Noel Tata and Chandrasekaran, met Home Minister Amit Shah and Finance Minister Nirmala Sitharaman earlier this month.
The two ministers strongly advised the Tata officials to maintain institutional stability of the trust and group, and resolve differences internally, people familiar with the development said.