An unprecedented power struggle has emerged at Tata Group, one of India's largest conglomerates, involving a conflict between the board of its holding company, Tata Sons, and its majority shareholder, Tata Trusts. Last week, Tata Sons extended the term of Chairman N Chandrasekaran and announced plans to consider a public listing for the holding company, which has sparked contention with the family charity that controls the 158-year-old Tata Group.
The board's decision to extend Chandrasekaran’s chairmanship and pursue a public listing is central to the ongoing dispute. The Tata Group comprises 26 publicly listed companies, including Tata Consultancy Services (TCS) and Tata Motors, with a combined market capitalization of $277 billion and influence over 17.7 million retail shareholders, according to investment advisory firm InGovern.
The Tata Group has a diverse portfolio spanning industries such as information technology, automobiles, steel, power, aviation, chemicals, and consumer goods. The conglomerate traces its roots back over 150 years to Nusserwanji Tata, who began trading in Mumbai. His son, Jamsetji Tata, expanded the business into an industrial group, which thrived during the U.S. Civil War due to rising cotton prices.
The current conflict was triggered on September 17 when Tata Sons reappointed Chandrasekaran as chairman in a 4-to-1 vote, despite opposition from Tata Trusts’ nominee, Noel Tata, who is also a half-brother of Ratan Tata. Noel Tata has described the reappointment as “illegal” under Tata Sons’ articles of association, claiming that both trust nominees were required to vote in coordination.
The dispute also involves the potential public listing of Tata Sons, which the Reserve Bank of India (RBI) requires for companies with assets exceeding $10.45 billion. Tata Sons attempted to avoid this requirement by deregistering as a nonbank finance company, but the RBI rejected this request prior to the board meeting. Tata Sons has stated it will comply with RBI requirements, while Noel Tata argues that a listing would undermine the group’s philanthropic mission.
The Shapoorji Pallonji Group, which holds an 18.4 percent stake in Tata Sons, is seeking to monetize its shareholding and supports the public listing, contrasting with Noel Tata’s position. The ongoing legal battle is expected to be decided in court, with both sides represented by prominent legal figures. Harish Salve leads the Tata Sons legal team, while Abhishek Singhvi represents Tata Trusts.
Historically, the Tata Group has faced boardroom disputes, including the removal of Cyrus Mistry as chairman in 2016 after disagreements over governance and strategy. The current situation reflects deeper issues regarding corporate governance and shareholder rights within the Tata Group, which has been a significant player in India's economic landscape.