4 min readNov 13, 2025 09:35 AM IST
First published on: Nov 13, 2025 at 07:19 AM IST
The Tata Group’s unique ownership framework — an empire of profit-driven enterprises built atop public charity trusts — is under strain. Recent discord within the Sir Dorabji Tata (SDTT) and Sir Ratan Tata Trusts (SRTT), which collectively own approximately 52 per cent of Tata Sons, the Group’s holding company, has revealed significant structural flaws: The lack of clear rules regarding trustee appointments, succession planning, term limits, and measures to prevent conflicts of interest.
The division among trustees regarding Mehli Mistry’s reappointment was reportedly exacerbated by disagreements concerning Tata Sons’ potential listing, age limitations for board positions, and conflicting allegiances stemming from trustees holding concurrent roles as fiduciaries, business executives, and board members of Tata Sons. But to date, no official explanation has been given as to why Mistry was not reappointed to the boards of the Tata Trusts or why, earlier, the trustees were split over the appointment of a nominee director to the board of Tata Sons. For an entity that controls India’s largest and most influential corporate conglomerate, such opacity is problematic.
In October 2024, the seven trustees of SDTT and SRTT passed a self-serving resolution granting themselves permanent tenure. Noel Tata and Venu Srinivasan were subsequently reappointed for life, but Mistry was shown the door. After a Maharashtra government ordinance limited permanent trustees to one-fourth of the board, Srinivasan’s term has now been reduced to three years. Simultaneously, Neville Tata — son of Tata Group chairman Noel Tata — has been appointed a trustee, raising fresh questions about succession and governance within the Trusts.
The Tata founders voluntarily chose to vest philanthropic trusts with 66 per cent ownership of Tata Sons. This inversion of billionaire raj that dominates the Indian corporate landscape makes Tata a rare experiment in aligning wealth with altruism.
Successive governments and regulators have, over time, accommodated the Tata model, choosing not to interfere in Tata Trusts’ internal affairs. The Companies Act, 1956, imposed restrictions on trust-held corporate shares through a “Public Trustee” mechanism. Over time, the Public Trustee system was phased out, and the Companies Act, 2013, completely omitted those controls, paving the way for the Tata Trusts to actively control Tata Sons. Simultaneously, amendments to Tata Sons’ charter granted the Trusts sweeping veto rights. Key board decisions of Tata Sons, including strategic and annual business plans, required prior Trust approval, effectively making them a “super-shareholder”.
Under Ratan Tata’s leadership (1991-2012), the Trusts and the Group acted in concert. Even when Cyrus Mistry publicly accused the Trusts of oppression, interference, and overreach in the affairs of Tata Sons, the trustees maintained a united public front. That unity has now fractured. As internal divisions spill into view, long-simmering questions over governance and accountability have resurfaced — this time from within. During the bruising legal battle with Mistry, the same issues were raised from the outside: He had alleged financial mismanagement, abuse of affirmative voting rights, and prejudicial conduct toward the Shapoorji Pallonji Group, the largest minority shareholder in Tata Sons. Today, it is the trustees themselves who have laid bare the inner sanctum of the Trusts.
India’s corporate governance framework is primarily tailored for for-profit entities, with scope for ambiguity around complex holding structures like that of the Tatas, where corporate control rests with philanthropic trusts. Structures like Tata Trusts need some light-touch, arm’s-length regulatory reform. Specifically, regulators should clarify that charitable or public trusts acting as controlling shareholders owe fiduciary duties — including the duty of fair dealing and non-oppression — to minority shareholders, consistent with the Companies Act, 2013. In addition, the exercise of affirmative voting rights by the Trusts in Tata Sons should be subject to formal disclosure and demonstrably aligned with both their charitable objectives and the interests of all shareholders. This would help close a critical regulatory gap while preserving the Trusts’ autonomy.
The founding vision of the Tata Trusts was meant to shield the Group from dynastic control and personal enrichment. To serve that vision, the Trusts now need a reformed charter that codifies clear rules on trustee appointments, term limits, renewals, trustee qualifications and conflict-of-interest safeguards. If it does happen, the Tata model will remain India’s most enduring experiment in enlightened capitalism. If not, it risks devolving into the very cronyism it once transcended.
The writer is a lawyer
India’s corporate governance framework is primarily tailored for for-profit entities, with scope for ambiguity around complex holding structures like that of the Tatas. 
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