Tata Sons rift overstated, but listing needed for transparency: Experts

The alleged rift within the Tata Trusts, the entity that controls 66% of Tata Sons, has grabbed headlines this month, but experts say the situation is being overstated.

Thomas Mathew, author of Ratan Tata's biography, described the differences among trustees as normal, saying, "It is true that there may be some difference of opinion, but I think you're making a mountain out of a molehill." He added that there was no question of a coup against Noel Tata, and that the trustees, who are all experienced professionals, would be able to resolve their differences.

"There could be differences of opinion on processes; there could be differences of opinion on objectives, on goals, but that's not causing any seismic tremors anywhere," Mathew said, emphasising that such debates are inevitable in any organisation, even within families.

While internal disagreements may not threaten the company, experts point to the need for Tata Sons to be publicly listed for transparency and accountability. Nirmalya Kumar, former member of the Group Executive Council and former head of strategy at Tata Group, said, "Listing of Tata Sons is actually a very good thing. It is good for Tata Sons; it is good for the country."

Kumar explained that public listing would ensure transparency for a company that holds significant stakes in major Indian firms and would also give minority shareholders an opportunity to exit if they wished. He noted that the Shapoorji Pallonji Group, which owns an 18.3% stake in Tata Sons, has been advocating for listing to protect its investment.

The debate around the listing comes amid heightened scrutiny following reports that four Tata Trusts trustees—Darius Khambata, Jehangir HC Jehangir, Pramit Jhaveri, and Mehli Mistry—were allegedly trying to challenge Noel Tata’s leadership. Sources close to the trustees have denied these claims, calling the narrative that portrays them as "villains" false.

One of the key points of contention has been whether Tata Sons should remain private. Shapoor Mistry of Shapoorji Pallonji Group called public listing "not just a financial move, but a moral and social imperative." The RBI has designated Tata Sons as an upper-layer non-banking financial company, which mandates public listing. However, Tata Sons has applied for an exemption, which is currently under review.

Despite the reports of discord, the Tata Trusts board recently met at the Taj Hotel in Mumbai, with some trustees reportedly open to revisiting the decision to keep the company private. Sources also noted that six months ago, the board had passed a unanimous resolution to maintain Tata Sons as a privately held company.

Experts, however, argue that transparency and accountability should guide the next steps. As Kumar said, "Any holding company that is this large and holds so much stake in so many major Indian companies should have the weight of transparency lifted."

While the internal differences make headlines, analysts believe the bigger focus should remain on Tata Sons' governance and the benefits of listing for both the company and the wider Indian economy.

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