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Tata Group officials meet Amit Shah, Nirmala Sitharaman amid boardroom conflict
Tata Trusts Chairman Noel Tata and trustee Mehli Mistry are said to be in conflict over board appointments and governance issues at Tata Trusts and Tata Sons.
Top Tata Group officials met Union Ministers Amit Shah and Nirmala Sitharaman in New Delhi on Tuesday, amid a boardroom conflict afflicting India's most reputed conglomerate, PTI reported citing sources.
Tata Trusts Chairman Noel Tata and Tata Sons Pvt. Ltd. Chairman Natarajan Chandrasekaran, along with Tata Trusts Vice Chairman Venu Srinivasan and trustee Darius Khambata, arrived at Shah's residence for a late-evening meeting. Sitharaman joined in later.
The meeting comes against the backdrop of infighting among the trustees of Tata Trusts over board appointments and governance issues.
“The primary question for the government, considering how significant and important the Tata Group is to the country's economy, is whether it can let an individual take control of it,” PTI quoted a source as saying. “The infighting among trustees of Tata Trusts has an impact on Tata Sons.”
Tata Trusts Conflict
Tata Trusts is said to be vertically split, with one section aligned with Noel Tata. The other group of four trustees is led by Mehli Mistry, who has ties with the extended Shapoorji Pallonji family that owns about 18.37% of Tata Sons. Mehli reportedly feels he has been kept out of the loop on key matters.
The conflict is over board seats at Tata Sons, which controls the 156-year-old group that spans around 400 companies, including 30 listed firms. Tata Trusts exerts decisive influence over the $180-billion conglomerate due to its nearly 66% stake in Tata Sons.
Tata Trusts, Tata Sons and Venu Srinivasan declined PTI's requests for a comment on the matter. Calls and messages to Mehli Mistry remained unanswered.
Tata Trusts Board
According to Livemint, the Tata Trusts boardroom conflict stems from the ouster of former defence secretary Vijay Singh as a director of Tata Sons after a tense meeting on 11 September. Four out of seven trustees opposed his continuation on the Tata Sons board.
These four trustees, led by Mehli Mistry, expressed frustration that Tata Trusts' three nominees on the Tata Sons board—Noel Tata, Vijay Singh and Venu Srinivasan—had failed to apprise them about several important developments involving Tata Sons.
Singh, however, continues to be a trustee at Tata Trusts.
Essentially, the Tata Trusts board is now split into two camps—Noel Tata, Venu Srinivasan and Vijay Singh on one side, and Mehli Mistry, Darius Khambata, Citibank India CEO Pramit Jhaveri and Pune-based Jehangir Hospital Chairman Jehangir H.C. Jehangir on the other.
Tata Sons Board Seats
The boardroom conflict at Tata Trusts comes at a time when Tata Sons is negotiating with the Reserve Bank of India to stay private. Tata Sons is also negotiating an exit for Shapoorji Pallonji from its board. The group controlled by the Mistry family is the single largest shareholder of Tata Sons Pvt. Ltd. with an 18.38% stake.
It's worth noting here that the Tata Sons board has three vacancies to fill— four, if one includes Vijay Singh. Any new appointment would require the support of the trustees.
While the Tata Sons website shows nine board members, Jaguar Land Rover's outgoing CEO Ralf Speth and Piramal Group's Ajay Piramal are reportedly set to step down in the coming months due to super-annuation. Independent director Leo Puri resigned in April.
The Tata Sons board thus has five members—Chairman Chandrasekaran, Noel Tata, Venu Srinivasan, Hindustan Unilever Ltd.'s Harish Manwani and Group CFO Saurabh Agrawal, according to its latest annual report.
Srinivasan’s continuation as the Tata Trusts nominee on the Tata Sons board will be decided at a board meeting on 10 October, Livemint quoted a person aware of the matter as saying.
