Noel Tata, long considered the natural heir to Ratan Tata's legacy, had often been kept at a distance for decades. However, following Ratan Tata's passing, things moved swiftly for his half-brother. In a rapid transition, the boards of Tata Trusts appointed Noel Tata as the new chairman without hesitation.
Prime Minister Modi also reached out to Noel Tata, offering his condolences on Ratan Tata’s death, further solidifying Noel’s acceptance as the natural heir to the Tata legacy.
But now the question arises: will 67-year-old Noel Tata flex his muscle to take a more active role rather than just watch from the sidelines? Sources suggest there is no hurry for Noel Tata, but changes are likely to start with the Trusts themselves, which hold 66 percent in the holding company, Tata Sons, which then holds stakes in Tata operating companies.
The entire current Tata Trusts team was picked by the late Ratan Tata, although it also includes Noel and his son and daughters.
TVS Motor's Venu Srinivasan, who is also on the board of Tata Sons, is part of Tata Trusts. Former bureaucrat Vijay Singh also sits on the Tata Sons board and is a trustee of Tata Trusts. In a way, these two trustees represent Tata Trusts on the board of the holding company that makes key strategic decisions for the operating companies.
Other trustees include Pramit Jhaveri, former CEO of Citibank India; Darius Khambata, Senior Advocate; and professionals like Jehangir H.C. Jehangir, Mehli Mistry, and J.N. Mistry.
Some suggest there will be a gradual plan to push for 'his men' on the boards of both Tata Sons and the operating companies as vacancies arise due to renewal, retirement, or resignation, and also at the Trusts as trustees.
While the AoA (Articles of Association) of Tata Sons has been amended to ensure that the same person cannot be Chairman of both Tata Trusts and Tata Sons, the interests of the promoters or largest shareholders (Tata Trusts) must always be aligned. In fact, Noel Tata has the support of the second-largest shareholder, the Shapoorji Pallonji Group, which holds an 18.5 percent stake in the holding company. Noel is married to Pallonji Mistry's daughter, who is the sister of Shapoor Mistry and the late Cyrus Mistry.
Twelve years ago, the SP Group pushed for Noel's name as Ratan Tata's successor when the selection committee struggled with global candidates, Tata professionals, and Indian names to fill Ratan Tata's big shoes.
"Noel will have a say in the strategic decisions, and those decisions will be conveyed through Tata Trusts' representatives — Srinivasan and Singh, who sit on both sides," say sources.
There are now reports that Noel Tata himself may join the board of Tata Sons. Some argue that he could join the board as a representative of Tata Trusts (and not as chairman). If this is a grey area in the AoA, Noel could be accommodated immediately, or this may require an amendment to the AoA, which could happen later.
The next big change, which many are speculating about, is the placement of Noel’s loyalists in the operating companies.
Ratan Tata was the Chairman of Tata Sons, the holding company of the Tata group, from 1991 until his retirement in December 2012. He then became Chairman Emeritus of Tata Sons, Tata Industries, Tata Motors, Tata Steel, and Tata Chemicals. Including TCS, Tata Power, Air India, Tata Consumer Products, and Indian Hotels Company, there are actually a dozen companies where Noel Tata may likely focus his attention.
N Chandrasekaran, who has been the Chairman of Tata Sons since January 2017, currently chairs the boards of key operating companies, including Tata Steel, Tata Motors, Tata Power, Air India, Tata Chemicals, Tata Consumer Products, Indian Hotels Company, and TCS.
In any hostile situation, Tata Trusts are well-positioned today, provided they have their own men as trustees who are also on the boards of companies.
During the process of appointing Ratan Tata’s successor, Tata Trusts also amended the AoA to establish a framework for the appointment and removal of the Tata Sons Chairman. Knowing that a non-Tata would eventually lead the group, Ratan Tata put several checks and balances in place, empowering the Trust with greater authority to intervene if issues arose, ensuring stability and control.
These powers now give Noel Tata the leeway to push his agenda. In addition, he has the support of the Shapoorji Pallonji Group.