Inside the 24 hours that laid bare Tata's brutal power struggle

Shortly before noon on September 17, the directors of Tata Sons Private, the holding company for India’s biggest conglomerate, gathered in a sleek boardroom on the fourth floor of its headquarters for a meeting.

On one side of the long table that can accommodate 20 people sat Noel Tata, chairman of Tata Trusts, the group of charities that own 66% of the holding company that in turn controls some of India’s biggest brand names from Air India to Jaguar Land Rover. Sleeves rolled up, a seven-page document at the ready, he came prepared with a strategy to keep the company that carries his family name in private hands.

Among those facing him was Natarajan Chandrasekaran, chairman of Tata Sons, wearing a suit and a fuchsia pink tie. Chandrasekaran, known as Chandra, had helmed the closely held company for a decade, and had signalled openness to the idea of taking it public. But after his reappointment failed to secure unanimity earlier this year, he decided to bow out instead of seeking another term.

Yet it wasn’t Chandra’s last act. In a surprise move, Tata Sons’ directors voted 4-1 to extend his tenure for another five years and planned to move forward with steps toward a public listing — rebuffing Noel’s position and deepening a rift over control and the future of the 158-year-old conglomerate. The split has set off a civil war that’s likely to reach India’s courts and Prime Minister Narendra Modi’s government before it can be resolved. A stark battle line has been drawn, with Tata Sons describing matters as settled and Tata Trusts calling the vote to extend Chandra’s term “illegal."

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The controversy over Tata Sons and its chairman’s tenure is set to fuel uncertainty about the Indian conglomerate’s leadership at a time when it’s helming several prestige projects for India. Tata Group has plans to expand local production of Apple Inc. iPhones and is building India’s first chipmaking facility. The group’s existing businesses are among the country’s most pervasive and renowned, including global brands like Taj Hotels, consumer staples such as Tetley tea, and software giant Tata Consultancy Services Ltd.

Tension among directors had been building before anyone arrived for the meeting at Bombay House, the group’s headquarters in Mumbai. The immediate chain of events began six days earlier, on September 11, when India’s central bank rejected a petition by Tata Sons to exempt it from a regulatory path that would require a public listing. Then, the day before the board convened, one of the trusts sought — unsuccessfully — to prevent its representative director, Venu Srinivasan, from attending the meeting and voting on the board proposals, reflecting internal schisms that would soon burst into public view.

This account of the 24 hours surrounding the meeting is based on interviews with people familiar with the events, who asked not to be identified because the discussions were private. Representatives for Tata Trusts and Tata Sons did not respond to requests for comment. Srinivasan did not immediately respond to a request for comment.

For the first half hour of the pivotal meeting, board members talked about normal business affairs, such as quarterly performance and accounts, the people familiar said. Then the discussion turned to the decision by the Reserve Bank of India, and the mood shifted as the gravity of the subject matter weighed on those in attendance, these people said.

Noel argued a listing wasn’t inevitable, methodically explaining why that position could be defended, without raising his voice or displaying any hint of hostile body language, according to people familiar with the meeting.

His proposal was for the board to ask Tata Sons to go back to the regulator, seek a hearing with top officials to plead its case and then exhaust all other legal options to remain private. If those efforts failed, he said the company could seek at least three more years to comply, arguing that a listing would require extensive corporate approvals and financial preparation.

The fate of Tata Sons’ structure as a closely held entity is intertwined with the death of Ratan Tata, the group’s former patriarch and Noel’s half-brother, in October 2024. Seven months before his death, the Tata Sons board unanimously resolved to remain private. Tata Trusts publicly reiterated that decision on Thursday.

The company then spent about 200 billion rupees ($2.1 billion) paying down debt and cleaning up its balance sheet, part of an effort to shed the regulatory status that could force Tata Sons to list.

But in the aftermath of Ratan’s reign, the conglomerate has come under increasing pressure from other stakeholders, especially the central bank, to list shares of Tata Sons on the public markets. Shapoorji Pallonji Group, Tata Sons’ second-largest shareholder, has separately pushed for a listing as a way to create liquidity for its stake.

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Proponents of a listing, including SP Group, argue it would improve transparency and accountability and create a mechanism for shareholders to unlock value. However, doing so would also dilute the Trusts’ influence over the company and could restrict its ability to freely make decisions shielded from intense investor and regulatory scrutiny.

The internal debate about whether to list has also become a proxy for the power struggle between Noel Tata and Chandra over who will control the group at a critical time. UK luxury carmaker Jaguar Land Rover is recovering from a damaging cyberattack, Air India is battling record losses following a fatal crash, and Tata Consultancy Services, one of the world’s biggest technology-services companies, is trying to revive growth as artificial intelligence reshapes its industry.

In addition to Noel Tata and Chandra, those assembled in Bombay House to discuss next steps included Srinivasan, chairman emeritus of Indian motorcycle maker TVS Motor Co. and, like Noel, a Tata Trusts nominee on the Tata Sons board. Also present were former Unilever executive Harish Manwani, Tata Sons Chief Financial Officer Saurabh Agrawal, and former World Bank executive Anita Marangoly George. The three would join Srinivasan to ultimately vote against Noel’s position.

In his carefully worded brief before the board, Noel maintained Tata Trusts already had resolved to keep Tata Sons private two years ago under Ratan, and that the charities controlling two-thirds of the company should be given a chance to consider any reversal of that policy before the Tata Sons board acted.

As an alternative, Noel put forward a proposal from the Shapoorji Pallonji Group to sell part of its 18.4% stake in Tata Sons. The plan called for Tata Sons to buy back SP shares in two tranches over 18 months, giving the group at least 250 billion rupees ($2.6 billion) in cash without forcing Tata Sons to list.

Noel said the buyback could be funded with internal cash, sales of stakes in listed Tata companies, outside investment in newer businesses and possible listings of some group units.

As he made his case, Noel also produced a written legal opinion from a former chief justice supporting the Trusts’ interpretation of the provisions governing the appointment and reappointment of Tata Sons’ chairman.

But in the first sign of disunity, the board declined to formally enter the written opinion into the record, the people familiar said. Then Manwani, chairman of the board’s Nomination and Remuneration Committee, presented a resolution seeking to extend Chandra’s role for five more years.

Chandra recused himself and left the room while the other directors considered his future, according to people familiar with the meeting.

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Noel opposed the extension. He argued that Chandra’s Auust 12 decision not to offer himself for another term had been clearly communicated and accepted, and told the board that “the page has turned.” Employees, lenders and capital markets had already acted on the executive’s departure, Noel argued, and reversing it would be disruptive.

He also pointed to Article 121 of Tata Sons’ governing documents, arguing that any move to appoint or reappoint the chairman of Tata Sons required support from a majority of Tata Trust-nominated directors. Those two nominees, however, were split down the middle: While Noel argued against the extension for Chandra, Srinivasan supported it, leaving the Trust vote at 1:1.

Noel tried again to invoke his special powers as chairman of Tata Trusts, but the others proceeded in backing Chandra for another five years. The board minus Noel also backed the proposal to move ahead with steps to comply with the central bank’s requirements.

Close to three hours after the meeting began, the directors broke for lunch. Noel had lost the key votes in the boardroom, and the fight was already moving beyond the fourth floor.

The Counterattack

By around 3 p.m., Noel departed Bombay House in a grey Range Rover, heading to an office where a team of lawyers and executives awaited him.

As he was crossing the city, Tata Sons began briefing the media on its account of the meeting. The holding company’s communications team said that Chandra had agreed to reconsider his departure, a majority of directors had reappointed him for five years and that Tata Sons would begin taking steps to comply with the RBI requirements. The resulting headlines flashed across financial wires, sparking substantial market moves.

By the time Noel reached his office, a narrative casting him as the loser in a decisive board battle was public. He personally vetted a press release that pushed back by indicating debate on the group’s future remained far from settled, and that his arguments would eventually prevail.

At about 4:30 p.m., an emailed salvo stressing those contentions landed in reporters’ inboxes. Over the next several hours, as Noel dictated further talking points and consultants and lawyers hammered out specific language, additional statements went out casting the board’s actions as unjustified and indefensible. By about 9:15 p.m., Tata Trusts had issued five detailed press releases — an extraordinary public confrontation for a group known for circumspection.

The Trusts disputed Tata Sons’ account, saying there had been no agreement to list and that the board had instead agreed to explore all available alternatives. On Chandra, the language was harder: his extension was “illegal,” they said, and the 1-1 split between the Trust nominees meant the appointment was a “legal nullity.”

The counteroffensive quickly moved beyond duelling press statements. By the end of the evening, Noel and his team were consulting senior attorneys about whether the board’s decisions themselves could be challenged in court. Late that night, after the last of the public statements had gone out, Noel finally left the office and headed home.

With both sides dug in, the path ahead is hard to assess. Chandra’s reappointment as a director still requires shareholder approval at Tata Sons’ next annual meeting, according to people familiar with the matter. The date for that meeting has yet to be announced.

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Meanwhile, investors are trying to price the rupture. Tata companies that had rallied initially on expectations for a speedy public listing of their holding company parent reversed course after the Trusts’ counteroffensive, showing traders’ expectations for an ugly and long-drawn-out battle to come.