When legendary industrialist Ratan Tata passed away, his half-brother Noel Tata was named Chairman of Tata Trusts, implying that he would now be in charge of the Tata conglomerate. However, Tata Sons, the main business in the group that owns over a dozen other Tata enterprises, cannot have Noel Tata as its chairman.
Noel Tata has encountered challenges before in his role as Chairman of Tata Sons. About 13 years ago, a similar circumstance occurred when he failed to gain the top position.
According to Times of India, in 2011, when discussions were underway about Noel Tata potentially becoming Chairman of Tata Sons following Ratan Tata’s resignation, the position was instead given to Noel Tata’s brother-in-law, Cyrus Mistry.
In 2019, when Noel Tata was made a trustee of the Sir Ratan Tata Trust, there were talks about appointing him as the Chairman of Tata Sons. Similarly, in 2022, when he became a trustee of the Sir Dorabji Tata Trust, he was again not given the chairmanship of Tata Sons.
In 2022, under the leadership of Ratan Tata, Tata Group passed a rule to prevent conflicts of interest. Tata Sons amended its Articles of Association to prevent any one individual from being Chairman of both Tata Trusts and Tata Sons simultaneously.
Since Noel Tata is currently the Chairman of Tata Trusts, he cannot be appointed the Chairman of Tata Sons. Notably, Ratan Tata was the last member of the Tata family to hold both positions at the same time.
Tata Sons is the holding company of all Tata Group companies and has significant stakes in them. Tata Trusts holds a 66% stake in Tata Sons, which means the Chairman of Tata Trusts effectively controls the conglomerate. However, the power to directly influence the group companies lies with the Chairman of Tata Sons. Hence, Ratan Tata enacted the rule prohibiting one person from holding both positions simultaneously.
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Source: News18
