The government is preparing to step in as tensions within Tata Trusts, which controls a majority stake in Tata Sons, have escalated into a full-blown governance crisis, multiple news reports stated. According to CNBC-TV18, Tata Trusts Chairman Noel Tata and Tata Sons Chairman N Chandrasekaran were expected to meet cabinet ministers and other top government representatives today (October 7). The meeting aims to address mounting concerns that internal discord among trustees could disrupt the functioning of Tata Sons and, by extension, the broader Tata Group.

At the core of the conflict are two critical matters — internal discord within Tata Trusts to safeguard stability at Tata Sons and outlining a roadmap for Tata Sons’ eventual public listing. The Reserve Bank of India designated Tata Sons as an “upper-layer” non-banking financial company (NBFC) three years ago. The RBI’s classification mandates public listing.

Attempts to ‘hijack’ Tata Sons

The rift widened after an email exchange among trustees allegedly hinted at a move to remove a Tata Sons board member Venu Srinivasan like an earlier ouster of Vijay Singh, a former Defence Secretary, as nominee director. Officials quoted by The Economic Times said the correspondence sparked fears of an attempt to “hijack Tata Sons” and consolidate control within a small group of trustees.

Recent actions such as attempts to influence the appointment of independent directors shortlisted by Tata Sons’ Nomination and Remuneration Committee (NRC) and interference in board minutes were considered as “serious corporate governance lapses”, the CNBC-TV18 report stated.

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‘Super board’ over Noel Tata

Board members who are reportedly leading the dissent are Darius Khambata, Jehangir HC Jehangir, Pramit Jhaveri and Mehli Mistry. They have been accused of functioning as a “super board” and undermining Noel Tata’s authority, the report further said.

The Tata Trusts board is scheduled to meet on October 10, even as the government seeks to defuse tensions and prevent the conflict from spilling into Tata Sons’ operations.