The directors of Tata Trusts are set to meet Friday, people familiar with the matter said, after government officials stepped in this week to defuse a boardroom fight at the powerful philanthropic body, which indirectly controls India’s oldest conglomerate the Tata Group.
The meeting follows a government-mediated discussion on Wednesday where officials urged representatives of Tata Trusts and Tata Sons Pvt., the group holding company, to settle their differences and avoid disruption to the group’s operations, according to people familiar with the matter, who asked not to be identified as the matter is private.
The dispute flared after some trustees removed former Indian defense secretary Vijay Singh as a nominee director from the Tata Sons board, and attempted to oust another director, Venu Srinivasan, the people said. Both are seen as close to Noel Tata, the chairman of Tata Trusts.
Representatives for the Trusts and Tata Sons did not immediately reply to requests for comment.
The Trusts owns 66% of Tata Sons, giving it the right to appoint a third of its board and the power to veto major decisions. That structure gives the Trusts decisive influence over appointments and strategy — and has become the lever through which the power struggle is playing out.
Any serious rift within Tata Trusts could have grave implications for Tata Sons and the wider Tata Group, which includes 26 publicly listed companies and reported an aggregate revenue of more than $180 billion in 2024-25.
Tata Sons IPO
One issue dividing the directors is the potential listing of Tata Sons, people familiar with the matter said.
India’s central bank had earlier classified Tata Sons as an upper-layer nonbank financial company, a label that requires it to go public. Some of the trustees worry is that an IPO would erode their veto rights and expose the company to takeover risks and stricter governance rules, the people said.
They are particularly concerned that “majority of minority” voting provisions could give the Shapoorji Pallonji Group, a key minority shareholder, greater influence—potentially shifting power from Tata Trusts to Tata Sons’ board and public investors, the people added.
The issue is not expected to come to a head anytime soon — Tata Sons expects new guidelines from the Reserve Bank of India by year-end that could exempt the group’s holding company from a mandatory share sale, the people said.
But Tata Sons Chairman Natarajan Chandrasekaran has been asked by the trustees to begin discussions with the Shapoorji Pallonji Group for a peaceful exit from the Tata holding firm, the people said.
Any delay in a Tata Sons IPO would hurt the Shapoorji Pallonji Group, which has been trying to sell its 18.37% stake to reduce debt. The debt-laden construction and engineering firm has struggled to monetize its holding, one of its few sizable assets, as financial pressures deepened after the pandemic.
While no specific exit actions or framework have been provided by Tata Trusts yet, the Shapoorji Pallonji Group is actively exploring several options, the people said. These include Tata Sons buying partial or full shares of their stake.
The Shapoorji Pallonji Group has a clear plan for the potential proceeds, Bloomberg News reported in August. They intend to use some of the money to repay debt held by its infrastructure unit, a move that would help lower its borrowing costs.
The meeting follows a government-mediated discussion on Wednesday where officials urged representatives of Tata Trusts and Tata Sons Pvt., the group holding company, to settle their differences and avoid disruption to the group’s operations, according to people familiar with the matter, who asked not to be identified as the matter is private.
The dispute flared after some trustees removed former Indian defense secretary Vijay Singh as a nominee director from the Tata Sons board, and attempted to oust another director, Venu Srinivasan, the people said. Both are seen as close to Noel Tata, the chairman of Tata Trusts.
Representatives for the Trusts and Tata Sons did not immediately reply to requests for comment.
The Trusts owns 66% of Tata Sons, giving it the right to appoint a third of its board and the power to veto major decisions. That structure gives the Trusts decisive influence over appointments and strategy — and has become the lever through which the power struggle is playing out.
Any serious rift within Tata Trusts could have grave implications for Tata Sons and the wider Tata Group, which includes 26 publicly listed companies and reported an aggregate revenue of more than $180 billion in 2024-25.
Tata Sons IPO
One issue dividing the directors is the potential listing of Tata Sons, people familiar with the matter said.
India’s central bank had earlier classified Tata Sons as an upper-layer nonbank financial company, a label that requires it to go public. Some of the trustees worry is that an IPO would erode their veto rights and expose the company to takeover risks and stricter governance rules, the people said.
They are particularly concerned that “majority of minority” voting provisions could give the Shapoorji Pallonji Group, a key minority shareholder, greater influence—potentially shifting power from Tata Trusts to Tata Sons’ board and public investors, the people added.
The issue is not expected to come to a head anytime soon — Tata Sons expects new guidelines from the Reserve Bank of India by year-end that could exempt the group’s holding company from a mandatory share sale, the people said.
But Tata Sons Chairman Natarajan Chandrasekaran has been asked by the trustees to begin discussions with the Shapoorji Pallonji Group for a peaceful exit from the Tata holding firm, the people said.
Any delay in a Tata Sons IPO would hurt the Shapoorji Pallonji Group, which has been trying to sell its 18.37% stake to reduce debt. The debt-laden construction and engineering firm has struggled to monetize its holding, one of its few sizable assets, as financial pressures deepened after the pandemic.
While no specific exit actions or framework have been provided by Tata Trusts yet, the Shapoorji Pallonji Group is actively exploring several options, the people said. These include Tata Sons buying partial or full shares of their stake.
The Shapoorji Pallonji Group has a clear plan for the potential proceeds, Bloomberg News reported in August. They intend to use some of the money to repay debt held by its infrastructure unit, a move that would help lower its borrowing costs.
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