A year after the death of Ratan Tata, the Tata Group—a gigantic Indian salt-to-steel conglomerate—finds itself facing severe crises. This business empire, which owns iconic British brands such as Jaguar Land Rover and Tetley Tea and makes the iPhone for Apple in India, is once again a divided house.
A boardroom power struggle among trustees has exposed internal rifts that prompted government intervention to avert a repeat of the public legal tangle experienced in 2016 with the ousting of former chairman Cyrus Mistry. Despite a seemingly brokered truce, reports indicate that Mehli Mistry, a close confidant of Ratan Tata, has been ousted from his position, although this information remains unverified by independent sources.
Prof. Mircea Raianu from the University of Maryland describes the ongoing tussle as a reemergence of unresolved issues regarding control of Tata Group and the extent of governance exercised by its majority shareholders, Tata Trusts. This unique structure, wherein the controlling shares of Tata Sons (the commercial holding company) are owned by Tata Trusts, benefits the group with tax and regulatory advantages while leading to governance challenges due to its dual commercial and philanthropic objectives.
The latest discord occurs as the Tatas face pressing challenges in diversifying into areas like semiconductors and electric vehicles, along with reviving Air India, following a tragic crash this year. Conflicts among trustees revolve around significant decisions concerning board nominations and strategic funding, with desires for increased influence at Tata Sons steering the tensions.
Furthermore, minority stakeholder SP Group's push for a public listing of Tata Sons raises fears among Tata Trustees about exposing decision-making to quarterly market pressures and compromising long-term focus amid nascent business expansions.
Publicist Dilip Cherian expresses concern over governance challenges and tarnishing the Tata brand, particularly after adverse events such as the Air India crash and a recent cyberattack on Jaguar Land Rover affecting production levels.
Amid these upheavals, chairman N Chandrasekaran's tenure continues, although he faces distractions from these internal conflicts. Unlike previous crises, the absence of a strong anchor like TCS—now under its own strains—leaves the Tata Group in a vulnerable state. Still, there is a possibility that a more transparent and accountable governance structure could evolve once these challenges have been addressed.
