Whoever controls the Sir Ratan Tata Trust and Sir Dorabji Tata Trust, and their dozen or so allies, holds sway over Tata Sons, the parent company of a vast salt-to-software business empire. He—Ratan Tata is the current chairman of both entities—master of dozens of operational arms such as TCS, Tata Steel, Tata Motors, Tata Power, and Tata Chemicals. Who will be Ratan’s heirs as the next chairman of the trusteeship? Rather, who, among the current saints, loyalists, and outsiders, had the most chance of doing so?

These inquiries are worth at least $275 billion, the combined market capitalization of Tata’s 17 listed companies as of 12 noon on December 2, 2022. Recent changes in regulations governing trusteeships and appointing new trustees signal that a succession strategy is underway. It will be a matter of years or months before we know whether a non-family ‘Tata’, ‘Parsi’ or an outsider will lead the two trusts. But herein lies the catch. Ratan Tata was pressured to separate the positions of Chairman, Putra Tata, and Chair, Tata Trust. Now, the same person cannot occupy both.

The heir to Ratan Tata’s fortune will not be the heir to his business. This opens the door for the continuation and entry of professional chairs at Tata Sons and other operational branches in the future, even as family members or loyalists closely monitor the workings of trusts and conglomerates through the trust’s 66% stake in Tata Sons. This is what Ratan Tata wanted to do when he installed a relative, the late Cyrus Mistry, as the ‘professional’ chairman of Tata Sons. But they fell apart in a bad way, which led to ugly legal and media battles.

Luckily for Ratan Tata, the Supreme Court order in the Tata-Mistry case made her position, and the trusteeship, stronger. The top court ruled that the trustees and their chairman had the right to interfere in the work of Tata Sons. Through one-third of the nominated directors on Tata Sons’ board, the trusteeship can influence important decisions such as five-year and annual strategic plans, future investments, and debt levels. They have affirmative rights—unless a majority of trustee-appointed directors give the nod, the issues raised by the board die naturally. This implies that the trustee could do something similar with the operational arm, whose fate is decided by Tata Sons.

The war with Cyrus shocked Ratan Tata after he stepped down as chairman of Tata Sons, sidelining his half-brother Noel and selecting Mistry as his successor. Now, the family is back. The insider is now important in Ratan’s scheme. Noel is trustee of the Sir Ratan Tata Trust and Sir Dorabji Tata Trust, which together own more than 50% of Tata Sons. He is trustee in two allied trusts, the Bai Hirabai JN Tata Navsari Charitable Institution and the JN Tata Endowment.

Just over a month ago, in a move apparently critical of succession issues, Noel’s three children, daughters Leah and Maya, and son Neville, were sworn in as trustees of the Tata Medical Center Trust, which runs a cancer treatment hospital in Kolkata.

The influx of young blood—kids in their thirties—and media reports that the three will be working under Ratan’s tutelage, suggests Ratan’s intention to pass the baton to one or three children in the distant future. (Recently, another Indian conglomerate owner, Mukesh Ambani, anointed his two sons and daughter as successors.)

Then there is another Tata which is more ‘hidden from view’. He is not directly visible but may play a larger-than-life role in succession planning. A media report stated that he “lived a quiet and secluded life in a modest flat in Colaba (Mumbai)”. As well as being a shareholder of Tata Sons and other operating units, Jimmy Tata, Ratan’s brother, is a trustee of the Sir Ratan Tata Trust and partners such as the Sarvajanik Seva Trust and Bai Hirabai JN Tata Navsari Charitable Institution. He doesn’t have a cell phone but has a pulse at Bombay House, the headquarters of the Tata Group. During the Mistry-Ratan war, he was in possession of a thick file containing “letters to the trustees of the Sir Ratan Tata Trust and the Tata Sons board” on several issues.

Never underestimate ‘Mistry’. After Cyrus’ rise and fall—the ascent of Mehli Mistry, whose mother was Cyrus’ mother’s sister—the Tata Trusts have been phenomenal. He is a trustee of the Sir Ratan Tata Trust and the Sir Dorabji Tata Trust. Most importantly, he is Ratan’s close friend. Before his death, Cyrus accused Mehli’s company of receiving aid from the Tata Group. The Supreme Court rejected this accusation. Ratan is likely to listen to Mehli’s advice.

Two of his friends, a civil servant and a businessman, are part of Ratan’s friends. Vijay Singh, the former defense minister, and Venu Srinivasan, owner of the TVS Group, were appointed co-chairs of the main Tata Trust and several allies. Both are directors at Tata Sons. As of 2021–22, Venu Srinivasan holds membership in key groups within the holding company, which include the Group Risk Management Committee, Audit Committee and Nomination and Remuneration Committee.

After Tata-Mistry’s public altercation, Ratan wants to professionalize the group and its beliefs. In 2020, he appointed Srinath Narasimhan as the first CEO of Tata Trusts.

Srinath retired on 30 October 2022. Recent reports indicate that the possible roster includes Siddharth Sharma, group sustainability officer for Tata Sons, and Sukaran Singh, CEO, Tata Advanced Systems. Ratan, added one of the reports, will take the last call. Given the separation between Tata Sons and the trust, N Chandrasekaran, Executive Chairman, Tata Sons, will not assume the leadership of the Tata Trust unless he leaves the holding company.

But what happened when he left the group? Will the new chairman of Tata Sons be a family man, a non-controlling trustee, or a ranking professional outsider? After Ratan, who will be the chairman of the Tata Trust?

Srinivas Nature

Independent journalist and writer

(alamsrinivas@gmail.com)



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