Vijay Singh, a trustee and vice-chairman of Tata Trusts, recently told The Indian Express that holding a vote on any issue was “unprecedented” for the organisation. His remarks come after a section of Tata Trusts reportedly voted against his reappointment as nominee director on the Tata Sons board. Singh added that the late Ratan Tata always believed decisions should be made through full agreement among members, not by voting, suggesting that the Trusts may now be moving away from that tradition.
“Ratan Tata was very firm that there should always be consensus and unanimity on issues and perhaps we are now in a different era,” he said.
The simmering power struggle within the Tata board
The vote, which was held recently, brought to light a simmering power struggle within the $180-billion Tata Group, with a bloc of four trustees in Tata Trusts led by M Pallonji director Mehli Mistry reportedly opposing Singh’s reappointment to Tata Sons, the group’s principal holding company.
Tata Trusts hold 66% of Tata Sons, which makes them the most powerful shareholder in the conglomerate.
Singh did not even attend the vote meeting. “Since I wasn’t there, the question of my voting for or against anyone doesn’t arise. As is common knowledge now, four trustees did vote against my continuance on the Tata Sons board for reasons that were apparently not spelt out,” he said.
Who is Vijay Singh?
Vijay Singh, a former Defence Secretary from the 1970 IAS batch, joined Tata Trusts in 2018 at the invitation of Ratan Tata. He served on the Tata Sons board until recently. Although the company’s website still shows him as a director, reports suggest he resigned after a group led by Mehli Mistry allegedly blocked his reappointment.
Singh had first joined the board in 2013 but stepped down in 2018 after turning 70, which was then the group’s retirement age. He returned in 2022 after Ratan Tata made the retirement rule more flexible.
The reported differences within Tata Trusts have sparked concerns about the group’s unity and governance, especially as it faces a changing business environment. Over the past year, Tata Group companies have together lost about $93 billion in market value, raising worries among investors.
The rise of two factions inside Tata Trusts
The main dispute within Tata Trusts is over who should be appointed to the Tata Sons board and when the long-delayed listing of Tata Sons should happen. What started as quiet differences has now split the Trusts into two clear groups, each claiming to represent the real Tata legacy.
One group, led by Tata Trusts chairman Noel Tata, includes trustees Venu Srinivasan of TVS Group and Vijay Singh. They favour continuity and believe in maintaining stability, discretion, and the Tata tradition of calm, consensus-based decision-making.
The other group, led by Mehli Mistry, includes former Citibank CEO Pramit Jhaveri, Jehangir Hospital chairman Jehangir H C Jehangir, and senior lawyer Darius Khambata. They argue that the Trusts have become too closed and top-heavy and say that governance systems need to be updated to meet modern standards of transparency and accountability.
Noel Tata and Venu Srinivasan also sit on the Tata Sons board. Reports indicate that the Mehli Mistry camp opposed three people proposed by Noel Tata for open board seats, while Noel Tata and Srinivasan, in turn, blocked Mistry’s own nomination.
Mistry is also a first cousin of the late Cyrus Mistry, who had once been considered for the role of Tata Trusts chairman after Ratan Tata.
Listing of Tata Sons – Another dispute
Another major point of disagreement is the listing of Tata Sons, which the RBI requires under its rules for “upper-layer” non-banking financial companies (NBFCs), the IE report said.
Tata Sons has applied to deregister as an NBFC to avoid the mandatory listing, saying it does not carry out lending activities. Meanwhile, the Shapoorji Pallonji (SP) Group, which holds an 18.37% stake in Tata Sons, has been pushing for the listing to unlock value, especially given financial pressures.
When approached by IE, a Tata Trusts spokesperson said that Tata Trusts does not have any further response at this stage.