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.
What do legal experts say?
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.
What do Tata Group observers say?
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.