Tata Group Crisis Brewing? Top Guns Meet Amit Shah As Tensions Rise Over Governance & Board Appointments

A crisis seems to be brewing in the highly-respected Tata empire. Reports indicate that the tension is mainly between Tata Sons and a section of Tata Trust over board appointments and governance issues.

Top honchos of the Tata group, including Tata Trusts chairman Noel Tata and Tata Sons chairman N Chandrasekaran, along with Tata Trusts vice-chairman Venu Srinivasan and trustee Darius Khambata on Tuesday met Union Home Minister Amit Shah at his residence. Finance Minister Nirmala Sitharaman was also present at the meeting. The Tata group did not offer any comment.

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The Central government, reportedly keen on maintaining stability within the $180 billion corporate behemoth, has decided to step in to stave of a crisis.

Incidentally, the crisis is threatening to escalate on the eve of the first death anniversary of Rata Tata, who took the empire to great heights with several major acquisitions in the West.

It is learnt that in 2017 itself friction had developed not only between Tata Sons and Tata Trust, but within the Trust itself. But the towering personality of Rata Tata and his sagacious leadership ensured internal stability.

Tata Trusts exerts decisive influence over India's most valuable conglomerate through its about 66% stake in Tata Sons, the promoter and holding company of the salt-to-semiconductor group.

Sources said Tata Trusts is said to be vertically split, with one section aligned with Noel Tata, who was appointed chairman of the Trusts following the death of Ratan Tata. The other grouping of four trustees is led by Mehli Mistry, who has ties with the extended Shapoorji Pallonji family, which owns about 18.37% of Tata Sons. Mehli Mistry reportedly feels he has been kept out of the loop on key matters.

Sources said the flashpoint is said to be board seats at Tata Sons, which controls the 156-year-old group that spans around 400 companies, including 30 listed firms.

"The primary question in front of the government, considering how significant and important the Tata Group is to the country's economy, is whether it can let an individual take control of it. The infighting among trustees of Tata Trusts has an impact on Tata Sons," a source said.