The governance dispute has revealed significant shifts in voting power dynamics within Tata Trusts. Without SRTT's 23.56% holding, SDTT would command 36.60% of the effective voting base, while six smaller Tata trusts would lift the bloc to 55.37%, enough to pass an ordinary resolution if they vote together. Excluding SRTT's 95,211 shares would reduce the effective voting base from 404,146 shares to 308,935 shares, representing 76.44% of the company's equity. The six smaller trusts collectively hold another 58,005 shares, equivalent to 14.35% of Tata Sons' total equity, comprising the JRD Tata Trust (4.01%), Tata Education Trust and Tata Social Welfare Trust (3.73% each), RD Tata Trust (2.19%), MK Tata Trust (0.60%), and Sarvajanik Seva Trust (0.10%).
Harish Salve, former Solicitor General of India, has emerged as a key legal advisor to Tata Sons Chairman N Chandrasekaran amid the ongoing governance dispute with Tata Trusts. Speaking to ANI, Salve described Tata Sons' legal position as 'legally perfect' and emphasized that the company must comply with Reserve Bank of India regulations requiring it to become a public company. According to Salve, the RBI's mandate is 'very straightforward', with the central bank requiring compliance with regulations applicable to Core Investment Companies (CICs). He noted that Tata Sons had earlier maintained that repayment of its loans in 2019 meant it no longer needed to be registered as a CIC, but the RBI did not accept this position, pointing out that companies in which Tata Sons holds majority stakes continued to have loans.
The board decision came after Chandrasekaran, whose current term ends on February 20, 2027, wrote to the board on August 12, 2026, saying he would not offer himself for reappointment. As reported by The Financial Express, on September 3, 2026, the Nomination Remuneration Committee unanimously resolved to request him to reconsider, citing his contribution and the wider interests of the Tata Group. At Thursday's board meeting, which lasted nearly three hours, Chandrasekaran acceded to that request, and the board resolved by majority vote to reappoint him by a 4-1 margin. However, Noel Tata, chairman of Tata Trusts, voted against the proposal, arguing that Chandrasekaran had already announced his intention to step down and had communicated it publicly without first consulting shareholders, including Tata Trusts. The Trusts stated that under the Articles of Association, appointing a Chairman requires the support of both nominee directors, and since Noel Tata voted against, it cannot stand. The Trusts submitted a legal opinion obtained from Justice Dr DY Chandrachud, former Chief Justice of India, supporting their position, though the board did not take note of it.
The dispute centers on Article 121A of Tata Sons' articles, which requires a majority vote of Trusts' nominated directors on Tata Sons board, with the chair of the meeting holding a casting vote in the event of a tie. As reported by The Times of India, Trusts argued that both nominees on Tata Sons board - Trusts chairman Noel Tata and vice-chairman Venu Srinivasan - would have to vote in favour of any resolution for it to pass. Even if one opposes, the meeting chair's casting vote cannot override it. Noel voted against Chandrasekaran's reappointment; Srinivasan voted for, resulting in a deadlock that left independent director Harish Manwani, who chaired the meeting, to cast the deciding vote. Tata Sons read the provision differently, maintaining that a split between the two nominee directors would be resolved by a casting vote. Independent director Harish Manwani exercised the casting vote in favour of Chandrasekaran, with other directors supporting the resolution being Srinivasan, Anita George and Saurabh Agrawal, against Noel's lone dissent, resulting in a final tally of four votes in favour and one against.
Proxy advisory firm Institutional Investor Advisory Services (IiAS) has raised serious concerns about the governance implications of the board's decisions, questioning whether they will survive shareholder scrutiny. As reported by NDTV Profit, IiAS noted that the decisions were made within a few hours and without the support of the company's controlling shareholder, representing an unusual situation in corporate governance. The proxy adviser questioned whether the decisions would ultimately survive a shareholder vote, particularly given that Tata Trusts collectively hold 66% of Tata Sons' equity and voting rights. IiAS specifically questioned the rationale behind Chandrasekaran's reappointment for another five-year term, particularly after he had earlier communicated that he did not intend to seek a third term. The proxy adviser suggested that a shorter extension could have been considered to allow Tata Trusts to resolve their internal issues and establish the selection process required under Tata Sons' Articles of Association for identifying a successor.
Even after the board's decision, Chandrasekaran faces another significant hurdle - he is liable to retire by rotation as a Tata Sons director and must be re-elected by shareholders. According to The Financial Express, the resolution concerning his directorship was scheduled to be considered at Tata Sons' August 18 annual general meeting, but the meeting was adjourned because of a lack of quorum. A fresh date has not yet been finalised, with Tata Sons receiving an extension to hold the AGM until December 31. The Trusts' approximately 66% ownership of Tata Sons gives them significant voting power at a valid shareholder meeting, but there is currently an obstacle to holding the AGM itself. Under Tata Sons' Articles of Association, at least five shareholders must be personally present to constitute a quorum, including an authorised representative jointly nominated by the Sir Dorabji Tata Trust and Sir Ratan Tata Trust, which together own about 52% of Tata Sons. The Sir Ratan Tata Trust, which holds approximately 23.56%, is currently unable to convene meetings because of a restraint imposed by the Maharashtra Charity Commissioner concerning the composition of the Trust's board and compliance with the statutory ceiling on lifetime trustees.
The board's decision to reappoint Chandrasekaran followed the Reserve Bank of India's rejection on September 11 of Tata Sons' application to surrender its registration as a non-banking financial company. As reported by The Financial Express, the RBI classified Tata Sons as an 'upper layer' non-banking financial company in 2022, a designation that requires listing within three years. That deadline lapsed in September 2025 while the deregistration request was under review. Board members reasoned that continuity of leadership would reassure prospective investors ahead of any listing process, according to PTI sources, with potential investors typically seeking assurance on management continuity once a company embarks on an initial public offering. The listing push followed the RBI's rejection, reviving the prospect of a stock listing the company had spent more than a year trying to avoid, including by repaying more than ₹21,000 crore in debt. The Shapoorji Pallonji Group holds about 18% of Tata Sons and has pushed for a listing to unlock value from its stake and support its own debt repayment. An eventual Tata Sons listing could rank among the largest IPOs in Indian history, with even a 1% stake sale valued at an estimated ₹15,000-20,000 crore, implying an overall valuation near ₹20 lakh crore for the conglomerate.
The governance dispute has created significant divisions within Tata Trusts regarding the company's future structure. According to ANI, Harish Salve revealed that some Tata Trust trustees are opposed to Tata Sons becoming a public company, with recent board meetings showing two trustees attended, with one voting in favour of the proposal and the other against it. Salve emphasized that a company with assets worth around ₹2 lakh crore could not be allowed to remain paralysed because of differences between trustees. He also defended the chairman's casting vote during the board meeting, stating that the situation further strengthened the case for Tata Sons becoming a public company. Salve claimed that once Tata Sons becomes a public company, restrictions contained in its Articles would fall away, addressing the current governance impasse. He noted that the Tata group had evolved into a global institution and that greater transparency and professional management were important for an organisation of its scale, stating that 'Tatas today are the face of India' with interests in sensitive sectors such as aviation and defence, as well as emerging areas including hydrogen.
