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New Delhi: When Ratan Tata the visionary leader and chairman of Tata Group and Tata Sons passed away on 9 October 2024 it rang alarm bells in Indian as well as the global financial and industrial landscape. He was arguably the last of the torch bearers of one of the world’s oldest and biggest conglomerates. Within a year of his passing away the cracks within the board have started making noises amid the fear of disintegration. Cyrus Mistry to Vijay Singh The Tata Group has been away from controversies for a considerable time except for the episode that involved Ratan Tata’s legal battle with the late Cyrus Mistry. The same thing seems to be running in the foreground in the form of the unprecedented developments at Tata Trusts with the faction led by trustee Mehli Mistry blocking the reappointment of trustee and vice-chairman of Tata Trusts former Defence Secretary Vijay Singh to the Tata Sons board. Tata Group missing Ratan Tata? It can be seen and heard that as of now there is not a single leader of the stature and calibre of the late Ratan Tata who could have managed the affairs of the group during these troubled times. The kind of discerning qualities required to put to use now are not visible and it raises many doubts and questions over the very future of the company. A few days would have been enough to iron out the differences but it’s been a year since the man left and the internal brouhaha is being discussed loud and clear. This is not supposed to be the Tata’s style of working. Ratan was not keeping well for a long time; hence it would not be erroneous to say that they had a good time on their hands. Tata Trusts has not yet approached court but… The Ratan Tata-Cyrus Mistry case went to the court which has not yet happened in this one. Tata Trusts chairman Noel Tata accompanied by two trustees and Tata Sons chairman N. Chandrasekaran met Union home minister Amit Shah and finance minister Nirmala Sitharaman in New Delhi on October 7 as the government is making attempts to defuse the situation before it gets worse. The central government is keeping a close watch on the affairs of the 133-year-old Tata Trusts which holds an influential 66 per cent stake in Tata Sons the holding company of the Rs 15 lakh crore Tata Group. October 10 meeting held at Bombay House The Tata Trusts board meeting concluded on October 10 at the group’s headquarters Bombay House and lasted until 2 p.m. Some board members were present in person while others joined via video call. Sources indicate that the meeting likely reviewed the proper functioning of the trust administration funding information and compliance with regulations. Reports indicate that the appointment of trustees and the renewal of their terms were not specifically discussed. How to utilise the money received by Tata Trusts from Tata Sons? The main issue discussed during the meeting is believed to be how to utilise the Rs 1700 crore (approximately Rs 17 billion) recently received by Tata Trusts as a dividend from Tata Sons for philanthropic purposes. This discussion has led to tensions among the trustees. Efforts are underway to maintain balance and defuse the growing tensions. The government is also monitoring this tension. It is believed that Friday’s board meeting was also a result of a government initiative. At present information regarding the decisions taken at the board meeting is not available. Internal disputes; power struggle The Tata Group one of India’s most prestigious industrial conglomerates is currently in the news due to internal disputes. This dispute is related to the ongoing power struggle between the Tata Trusts and Tata Sons. The matter surfaced just before the first death anniversary of Ratan Tata. At a time when the country’s economy needs stability the stability of the Tata Group is crucial. Cause of dispute within Tata Group and its impact on Indian economy and GDP The dispute began over appointments to the Tata board and governance policies. According to reports two factions have emerged within the Tata Trusts. One faction is led by Noel Tata the stepbrother of the late Ratan Tata. The other is led by Mehli Mistry (cousin of the late Cyrus Mistry). They are associated with the Shapoorji Pallonji family which holds a significant stake in the Tata Group. Earlier at the board meeting held on September 11 a proposal was made to re-nominate former Defence Secretary Vijay Singh to the board; however some trustees rejected it. This was followed by a proposal to nominate Mehli Mistry but Noel Tata and Venu Srinivasan opposed it further deepening the controversy. If this dispute escalates further it will impact not only the stock market and investors but also the Indian economy. The Tata Group has investments worth over Rs 25 lakh crore in listed companies. This group contributes about 4% to India’s GDP. Influence of Tata Trusts Tata Trusts wields decisive influence over India’s most valuable conglomerate through its approximately 66 percent stake in Tata Sons the holding company of the group which operates businesses ranging from salt to semiconductors. According to sources Tata Trusts has two stakes. One is associated with Noel Tata who was appointed chairman of the trust after Ratan Tata’s death. The other group of four trustees is led by Mehli Mistry who is related to the extended Shapoorji Pallonji family. He holds approximately 18.37 percent of Tata Sons. Main bone of contention According to sources the main bone of contention is the board seats of Tata Sons which controls the 156-year-old conglomerate comprising approximately 400 companies including 30 listed companies. The dispute is expected to be discussed during a meeting of the six trustees of Tata Trusts a major group representing several charitable trusts including the Sir Dorabji Tata Trust and the Ratan Tata Trust. The 75-year age rule and demands surrounding Mehli Mistry Following Ratan Tata’s death Tata Trusts introduced a policy. Under this it was made mandatory to decide on the reappointment of nominated directors to the Tata Sons board on an annual basis upon reaching the age of 75. At the September 11 meeting the proposal to reappoint 77-year-old former Defence Secretary Vijay Singh—who had been a director since 2012 and a trustee since 2018—was made by Trusts Chairman Noel Tata and Venu Srinivasan (Empathy Chairman of the TVS Group). Four other trustees—Mehali Mistry Pramit Jhaveri Jehangir H.C. Jehangir and Darius Khambata—opposed the move leading to the rejection of the proposal. Following this the four trustees demanded that Mehli Mistry be nominated to the Tata Sons board. However Noel Tata and Venu Srinivasan opposed this move and stressed the need for a transparent process in accordance with Tata values. Subsequently Singh voluntarily resigned from the Tata Sons board. (The views expressed in this write-up are the personal views of the author and they do not reflect the editorial views and policies of India.com either in part or in whole)