Government Steps In To Ease Tensions Ahead Of Key Board Meet
Amid growing rifts over governance and board appointments at Tata Trusts, top Tata executives met Home Minister Amit Shah and Finance Minister Nirmala Sitharaman.
The government is said to have intervened to resolve the escalating tensions surrounding board appointments and governance at the Tata Trusts, the controlling shareholder of Tata Sons. Senior leaders of the Tata Group, including Tata Trusts Chairman Noel Tata and Tata Sons Chairman N Chandrasekaran, met with Union Home Minister Amit Shah and Finance Minister Nirmala Sitharaman on Tuesday.
According to news reports, the government has urged the Tata Group leadership to stabilize Tata Trusts “by whatever means necessary” and prevent internal conflicts from impacting Tata Sons.
This comes days before the first death anniversary of former Tata Group chairman Ratan Tata. Also, a crucial Tata Trusts board meeting is scheduled for October 10.
Growing Rift At Tata Trusts
Reports indicate that there are two factions at the centre of this alleged boardroom tussle at Tata Trusts. One led by Noel Tata, who succeeded Ratan Tata as chairman in 2024, and another led by Mehli Mistry, who is aligned with the extended Shapoorji Pallonji family, significant stakeholders in Tata Sons.
Earlier this year, the Tata Trusts rejected the reappointment of Vijay Singh, a former Defence Secretary, as a Tata Sons board director. Four trustees (Mehli Mistry, Darius Khambata, Pramit Jhaveri, and Jehangir HC Jehangir) opposed the move, leading to the rift. They then attempted to appoint Mehli Mistry to the Tata Sons board, but faced resistance from Noel Tata and Venu Srinivasan, who cited the need for a unanimous agreement and adherence to Tata values.
For context, following the death of Ratan Tata in October 2024, Tata Trusts introduced a policy requiring annual reappointment of nominee directors on the Tata Sons board once they turn 75
Tata Trusts is the single largest shareholder of Tata Sons, holding a 66% stake in the privately held entity. SP Group, through two entities — Cyrus Investments (9.2%) and Sterling Investment Corporation (9.2%) — holds over 18% of Tata Sons.
Tata Sons’ listing plans
All eyes are also on the contentious issue of Tata Sons’ listing. The Reserve Bank of India (RBI) has mandated that upper-layer non-banking financial institutions go public within three years from the classification date, which for Tata Sons meant a September 30 deadline.
In March 2024, Tata Sons filed to deregister as a Core Investment Company (CIC), a move that would exempt it from the listing mandate; however, the RBI has not yet approved this application.
TCS to kickstart Q2 earnings season
Tata Group’s cash cow, Tata Consultancy Services (TCS) is set to report second quarter earnings on October 9. Reports suggest that the tech bellwether will skip the post-earnings press conference as the date overlaps with Ratan Tata’s death anniversary.
The Tata Group’s market capitalisation has eroded by over 15% year-to-date (YTD). This is led by underperformance across some of its companies this year, such as Tata Motors (-8%), Indian Hotels (-16%), TCS (-27%), Trent (-33%), and Tejas Networks (-50%) YTD.
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