Tata vs Mistry again: Majority votes to oust Mehli from Trusts

MUMBAI: Mehli Mistry, Ratan Tata‘s long-time confidant, executor of his will, and a man widely seen as custodian of the late chairman’s legacy, has been denied reappointment as lifelong trustee of the Tata Trusts. The decision was taken after Noel Tata, chairman of the Trusts, and vice-chairmen Venu Srinivasan and Vijay Singh declined to give their consent, marking a rare break from the convention of unanimity in the apex bodies that control Tata Sons. Three others, Pramit Jhaveri, Darius Khambata and Jehangir Jehangir, were in favour of Mistry’s reappointment while Ratan Tata’s brother Jimmy Tata abstained from the vote. Since the resolution concerned him, Mistry did not participate in the vote. The two main philanthropic arms of Tata Trusts – Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT) – follow different voting systems: as per the trust deed, a simple majority is required at SDTT and unanimity at SRTT. For appointments and removals of trustees, however, unanimous consent is required. Based on these provisions, Mistry’s three-year tenure at the Trusts formally ended Tuesday, on a 3-2 vote.Noel Tata needs to manage growing internal divisions Four trustees, Noel Tata, Srinivasan, Singh and Khambata, sit on both SDTT and SRTT. Others are Jhaveri at SDTT and Jehangir Jehangir and Jimmy Tata at SRTT. The vote across the two trusts thus stood at three against Mistry’s reappointment and two in favour. Mistry had earlier described the process of trustee renewal as a “procedural formality,” referring to an Oct 17, 2024 resolution passed unanimously by the Trusts, which said on “expiry of tenure of any trustee, that trustee will be reappointed by the concerned Trust without any limit being attached to the period of tenure.” When Srinivasan was made a lifelong trustee last week, Mistry had backed the move but added a caveat in writing: “Should any trustee elect not to pass this resolution reappointing Srinivasan, or an identical unanimous resolution for all other trustees as and when their respective tenures expire, then in such event, I do not provide my formal approval for the reappointment of Srinivasan”. A senior lawyer, however, said there cannot be such conditional approval to a resolution: it must be either yes or no. His probable legal recourse, if any, could only involve action against the Trusts on the grounds that three trustees violated the unanimous Oct 17, 2024 resolution. But this would mean questioning the rules laid down in the original trust deed. If Mistry proceeds legally, he will be the second Mistry to take on a Tata in less than a decade, setting the stage for a potential Mistry vs Tata scenario. If his removal raises the prospect of a courtroom battle, it also underscores growing divisions within the Trusts that together hold about 66% of Tata Sons. For Noel Tata, the development presents immediate challenges: managing internal discord and addressing the possibility of another Mistry-versus-Tata standoff, nine years after the first one that shook the group in 2016. Interestingly, Mehli, who is Cyrus’s first cousin, had proposed Noel as Trusts chairman soon after Ratan Tata’s passing in 2024. Differences among trustees widened last month when Mistry, Jhaveri, Khambata, and Jehangir voted to remove Singh as the Trusts’ nominee on the board of Tata Sons. The four raised governance concerns saying they were not kept informed by nominee directors on matters related to investments of over Rs 100 crore by Tata Sons as per the Articles of Association. Consensus within Tata Trusts is now becoming a crucial issue for Tata Sons as it navigates growth and a debate over a public listing. The issue of governance will now continue to loom over India’s largest conglomerate as it moves forward, posing questions for regulators and investors.