Battle At Tata Group: Has Noel Tata Won Round One?

It could prove to be a masterstroke by 69-year-old Noel Tata, chairman of Tata Trusts, which holds 66% in Tata Sons, the holding company of the $180-billion Tata Group. Noel, who has strongly opposed the listing of Tata Sons, seems to have found a possible way out of this vexatious issue. Tata Sons had earlier sought regulatory relief from the Reserve Bank of India as it tried to avoid a mandatory listing. Initially, there appeared to be broad alignment within the Tata establishment. But after Noel expressed reservations about a third term for N Chandrasekaran as chairman of Tata Sons, two camps seem to have emerged. Now Noel has made a bold move. Tata Trusts has proposed a strategic reorganisation of Tata Sons through the merger of Tata Electronics Systems Solutions Pvt Ltd and Tata Consulting Engineers with the holding company. The objective is clear: after the restructuring, Tata Sons would seek to operate neither as a NBFC nor as a Core Investment Company. If the restructuring achieves that regulatory status, the very basis for the RBI-mandated listing could disappear. The ball is now in the RBI’s court.  But Noel has another battle on his hands — N Chandrasekaran’s third term. Chandra had announced on August 12 that he would not seek another term after his current tenure ends in February 2027. But the September 17 Tata Sons board meeting dramatically reversed that position, approving his reappointment for another five years by a majority vote. Noel was the sole dissenter. So, far from ending, the battle for Bombay House may only have entered its next round. In some ways, Noel Tata appears to be going through the same grind that his elder half-brother, the late Ratan Tata, faced after taking charge of Tata Sons in 1991.