Tata scion struggles to consolidate control at one of India’s biggest groups

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The Tata scion who chairs the powerful ownership trusts at the $300bn conglomerate is struggling to consolidate his control as factional fighting fuels uncertainty over the stability of one of India’s biggest groups.

Noel Tata faces divided boards at Tata Trusts, a set of charitable trusts that own 66 per cent of Tata Sons, the conglomerate’s holding company.

Tata has tried to position his son Neville — currently an executive in the group’s retail business — as a potential successor to Tata Sons chair N Chandrasekaran, according to three people familiar with the situation.

The ructions at Tata have caught the attention of India’s government, which has shown concern about the stability of a group that employs more than a million people and runs some of the country’s biggest companies.

They come as the conglomerate faces several challenges to its core businesses including its crown jewel, Tata Consultancy Services, which is seen as vulnerable to the growth of AI-powered services.

Noel took over as chair of Tata Trusts from business patriarch Ratan Tata, his half-brother who died in 2024. He has met resistance from Venu Srinivasan, vice-chair of the two largest trusts and chair emeritus of motorcycle company TVS Motor, the people said.

Neville was last year appointed to the board of Sir Dorabji Tata Trust, one of the two main trusts, but attempts to install him in the second trust, Sir Ratan Tata Trust, have failed at the most recent three meetings. A person aware of the trusts’ decision-making, however, said the obstacle to his appointment was procedural.

Insiders suggest that the disagreement between Tata and Srinivasan may slow the Tata Sons board’s approval of Chandrasekaran for a third five-year term. That is because Tata, who sits on the conglomerate’s board as one of the Trusts’ nominees, has the power to delay or even deny Chandrasekaran’s approval provided Srinivasan does not support Neville. Tata Sons’ next board meeting is on Tuesday.

It also faces the threat of a forced public float by the Reserve Bank of India, which classifies it as a non-bank financial company subject to mandatory listing. That would loosen the hold of the trusts over the company because it would have to operate with more transparency.

A trustee called the forced listing an “existential issue” at a Tata Trusts board meeting in September. The RBI has not announced its final decision and has repeatedly declined to comment on the matter.

There have been several high-profile exits from the trusts over the past six months. Mehli Mistry, a powerful former trustee at the two main trusts, concluded his term and left in November after a disagreement over Tata Sons board appointments and other governance issues spilled into the public and led to a rare government intervention from New Delhi.

India’s home minister Amit Shah and finance minister Nirmala Sitharaman, the top two figures in Prime Minister Narendra Modi’s government, convened a meeting with some of the trustees and senior Tata management to calm tensions.

“Mehli Mistry was supposed to be very close to Ratan Tata and his power on the boards of the trusts also came through that relationship,” said Shriram Subramanian, founder and managing director of InGovern, a Bengaluru-based corporate governance research and advisory firm.

Pramit Jhaveri, a former chief executive of Citi India, said during a Sir Dorabji Tata Trust board meeting in October that there was a “sense of alienation” among some of the trustees after they felt crucial information regarding the trusts was withheld from them.

In January, he informed Tata that he did not want to be considered for a reappointment and left the trust last week after his term concluded.

“The issues of succession planning at the trusts I think need to be clearly outlined, there is a sense of opacity on that,” Subramanian added.

Noel and Neville Tata, Srinivasan, Tata Trusts and Tata Sons did not respond to requests for comment. Mistry and Jhaveri declined to comment.