Tata Group internal rifts: Government urges leadership to restore stability

The Indian government has reportedly urged Tata Group leadership to restore stability within Tata Trusts, following internal divisions that threatened to spill over into Tata Sons, the holding company of India’s largest conglomerate, according to The Economic Times.

The tensions involve four trustees within Tata Trusts, who sources say acted as a “super board,” undermining the authority of Chairman Noel Tata.

Government meeting with Tata leadership

Home Minister Amit Shah and Finance Minister Nirmala Sitharaman reportedly held a nearly hour-long meeting with Tata Trusts Chairman Noel Tata, Vice-Chairman Venu Srinivasan, Tata Sons Chairman N Chandrasekaran, and Trustee Darius Khambata.

The ministers emphasised that stability must be restored “by whatever means necessary,” warning that internal rifts should not affect Tata Sons’ operations. The government also reportedly encouraged decisive actions, including the possible removal of any trustee whose actions could destabilise the conglomerate.

Officials reminded the trustees that Tata Trusts’ majority stake carries a “public responsibility,” given the group’s size, market influence, and economic significance. Regulatory matters, including the Reserve Bank of India’s listing mandates for upper-layer NBFCs and liquidity solutions for the Shapoorji Pallonji Group, were also discussed.

Alleged infighting among trustees

Sources close to the group told CNBC-TV18 that the government “cannot be a silent spectator to the coup attempt by four trustees of Tata Trusts.” The trustees allegedly involved—Darius Khambata, Jehangir HC Jehangir, Pramit Jhaveri, and Mehli Mistry—are said to have tried to influence Tata Sons’ governance by vetting board meeting minutes and approving independent directors.

The rift within Tata Trusts reportedly emerged after the passing of former Tata Sons chairman Ratan Tata in October 2024. The divide has been particularly evident between the four trustees of the Dorabji Tata Trust and the three others, including Noel Tata.

Market response

Despite the reported tensions, shares of several Tata Group companies traded higher on Tuesday. Titan Company rose nearly 4% to Rs 3,552.80 after reporting 20% year-on-year growth in consumer business revenue for Q2 FY26, with international business up 86%. TCS shares increased about 2% to Rs 3,025, while Tata Steel, Trent, and Tata Technologies saw minor gains. Tata Motors slipped 0.34% to Rs 695.65.

The developments place the Tata Group under heightened government and market scrutiny, particularly regarding governance issues within Tata Trusts, which holds approximately 66% of Tata Sons.