Mehli Mistry, regarded as one of Ratan Tata’s long time confidants, lost his bid to reappointment on Tuesday (October 28) after a majority of trustees voted against his continuation on the boards of Sir Dorabji Tata Trust and Sir Ratan Tata Trusts, the two principal entities that along with other group trusts hold a combined 66% stake in Tata Sons, the Tata Group’s holding company.
Following a circular resolution last week in which three of the six trustees opposed his reappointment, Mistry is poised to exit the Tata Trusts board.
The latest crisis potentially plunges the philanthropic entities that control Tata Sons into turmoil, with the outgoing trustee almost certain to challenge the move in court. Tata Trusts has the authority to appoint a third of the holding company’s board as well as veto major decisions. This ownership structure has become the primary lever in an ongoing power struggle over control of the Tata Group.
However, it remains unclear whether Mistry will now revoke his earlier conditional approval for Tata Trusts Vice-Chairman Venu Srinivasan’s continuation as a trustee, or pursue legal recourse to challenge his rejection. Under Ratan Tata’s leadership, the selection of trustees was traditionally guided by consensus and unanimity.
Mistry’s exit comes against the background of rising tensions within the Tata Trusts — with Noel Tata, Srinivasan and Vijay Singh on one side, and Mistry, Darius Khambata, Pramit Jhaveri and Jehangir H.C. Jehangir on the other.
The discord centres on governance practices, lifetime trusteeships and board representation, exposing an unusual split within the Trusts over how they should exercise control and nominate directors to Tata Sons.
According to those in the know, Tata, Srinivasan, and Singh opposed Mistry’s reappointment to the Trusts. His term ended on Tuesday.
Legal opinion is split on the course Mistry could take or on the implications of the October 2024 resolution that trustees shall be made “lifelong trustees” on reappointment. The resolution called for unanimous reappointment of the trustees.
One legal expert said that the resolution implies that trustees must be unanimously reappointed for life. “The vote against Mehli Mistry can be seen as violating the October 2024 resolution,” the expert said.
However, the language of the resolution leaves room for interpretation. “The resolution said that if one is re-appointed, it would be for life. It does not necessarily mean that one must be reappointed,” a corporate lawyer said.
Senior Supreme Court lawyer H.P. Ranina told a television channel, “Hypothetically, if any trustee fails to get reappointed, then that means the other Trustees have violated the decisions taken on the October 17, 2024 board meeting. That trustee who fails to get reappointed has the right to take legal action against Tata Trusts.”
While some legal experts maintain that there is not much Mistry can do, others say he has valid grounds to contest Tuesday’s decision. Mistry declined to comment on the matter when contacted by FE.
“The voting process was done in accordance with the law. So ‘bad governance’ cannot be grounds for litigation in this case,” a legal expert said.
Mistry had earlier attached conditions to his vote favouring the reappointment of Venu Srinivasan, which came up for vote last week. He had reportedly said that if his reappointed is not approved, he will revoke his vote in favour of Srinivasan’s reappointment.
“Retrospectively revoking a vote on a settled matter may result in court proceedings, since it is not typically legal to do so,” another lawyer with expertise in company law said.
Tata Group observers say while the crisis will not have any impact on the day-to-day operations of Tata Sons and the group companies, prolonged litigation risks stalling nominations and slowing approvals for capital allocation, mergers & acquisitions and leadership moves across autos, steel, aviation, renewables and chips. The Tata Sons board now has to fill four vacancies after Singh’s exit. The other three slots opened up after the exit of former Jaguar Land Rover CEO Ralf Speth, industrialist Ajay Piramal and independent director Leo Puri. What began as subtle dissonance after Noel’s selection as chairman, had hardened into two distinct factions, each claiming to uphold the “true spirit” of the Tata legacy
The rift also revives questions around a Tata Sons listing (something the SP Group, the second-largest shareholder has publicly nudged), and whether ownership stability at the Trusts is compatible with tight listing timelines or disclosure expectations.
Noel wants to be Ratan Tata within a year: Mistry camp
The outcome of the Tata Trusts voting process hasn’t taken the Mehli Mistry camp by surprise as it was on expected lines as it was a “direct revenge” by the other faction for not approving Trustee Vijay Singh’s continuance on the Tata Sons Board. Singh had to quit as the proposal was rejected by four of the trustees.
Sources close to the Mistry camp said while a future course of action has not been finalized as yet, the crux of the problem was Tata Trusts Chairman Noel Tata’s “hurry” to acquire the “supreme status” that Ratan Tata got after years of hard work at the top
Ratan Tata’s involvement in the Tata Trusts began in 1965 when he was inducted as a Trustee for the Sir Ratan Tata Trust (SRTT). By 1989, he became chairman of Sir Ratan Tata Trust, and later, of the Sir Dorabji Tata Trust in 1993. The late chairman-emeritus of the Tata Group achieved an exalted status only after those many years of providing strong leadership. But his half-brother wants to be in that position in just a year, the sources said.
Asked to elaborate, the sources said all that the four trustees wanted was “more respect and the courtesy of getting information on issues concerning Tata Sons”. But those requests were denied as the chairman and the vice-chairman (Venu Srinivasan) wanted to keep everything close to their chest. “It’s blatantly unfair to expect us to support resolutions, the details of which were not shared with us in advance,” they said.
The sources admitted under Ratan Tata, things were different as his word was almost the law. “But that happens only after years of proven leadership. With Noel’s elevation, we expected more participative leadership. He disappointed all of us,” the sources said.
The sources sympathetic to the Mistry camp’s views also said the move to oust Mistry was in violation of the resolution passed by Tata Trusts on October 17, 2024. Just last week, when Srinivasan was made a lifelong trustee, four trustees led by Mistry had described the move as a “procedural formality,” referring to a unanimous decision in October last year to grant themselves permanent positions. Under the Trusts’ rules, appointments and removals require unanimous consent. Noel Tata was elected chairman of Tata Trusts on October 11, 2024, following the demise of Ratan Tata on October 9, 2024. At that time, Mistry had supported Noel Tata’s candidature for the chairmanship.