The business media over the past week has focused on the board of directors of Tata Sons voting to give Chairman Natarajan “Chandra” Chandrasekaran another full five-year term at the top as well as a public listing of Tata Sons – with four members of the board voting for these with Noel Tata being the sole dissenting board. All members of the Tata Sons board seem fully backing Chandra who has, not surprisingly, withdrawn his earlier resignation and allowed himself to be available for a third term as Chairman of the Tata holding company. Both sides have hired formidable lawyers – Tata Sons have signed up Harish Salve while Noel Tata has pulled in Abhishek Manu Sanghvi for the big legal battle ahead.
Yet, for Noel Tata, the fight against the board members of Tata Sons is merely the proxy battle for the bigger challenge he is facing as chairman of Tata Trusts with the trustees his half-brother Ratan Tata put in place before the latter’s death. The Tata Trusts together control 66% of the Tata Sons shares – but it has been a house divided over the past year. While the trustees had unanimously chosen Noel Tata as the chairman of the Tata Trusts when Ratan Tata passed away, his relationship with several of them has deteriorated since then. But since then, Noel’s efforts to remove some of them while bringing in people he has more faith in has seen two members – industrialist Venu Srinivasan and Mehli Mistry – become thorns in Noel Tata’s side.
Ratan never particularly like Noel and never thought that his half-brother could handle the Tata empire. He had overlooked Noel as a candidate when he was stepping down as Tata Sons chairman because of age – and instead, after a year-long search, anointed Cyrus Mistry as the new chairman. In fact, the only reason Noel had a role in the Tata group was because he handled the Tata retail units started and built by his mother, Simone.
Ratan Tata’s relationship with Cyrus soured soon enough and the latter was thrown out as chairman of the board by the directors instigated by Ratan. Among the directors who voted against Cyrus then was Venu Srinivasan, who had joined the board only a month before the Cyrus ouster. Venu Srinivasan had joined the Tata Sons board in November and by mid December, he had decided that Cyrus was unfit to be the chairman. This was despite the fact that he was attending perhaps his first full board meeting of Tata Sons and, as per records, Cyrus had got a glowing performance review from the board of directors who had expressed their full confidence in him just months prior to the nasty battle that ousted him.
Two people – Venu Srinivasan and Mehli Mistry – played a big role in supporting Ratan Tata to the hilt in the battle against Cyrus Mistry. Mehli was Cyrus’s cousin but apparently was not very fond of the latter. There were others – industrialist Ajay Piramal who had been appointed to the Tata Sons board at the same time as Venu Srinivasan was also one of those who voted against Cyrus in the crucial board meeting. (Mehli Mistry was not part of the Tata Sons board though he was a close confidante of Ratan Tata).
Later, when the second search for Tata Sons chairman took place, Noel was once again overlooked for the top spot with Ratan Tata settling for then TCS chairman N Chandrasekaran. Chandra was of course a good candidate – he ran the most profitable company in the Tata group by far and it was TCS dividends that had been the main income of Tata Sons. (Two other Tata companies – Tata Steel and Tata Motors (including JLR) – were also highly profitable in some years but never as consistently churning out money as TCS).
Even when it was clear that Ratan Tata’s health was deteriorating, he never considered giving Noel any great responsibility of steering either the Tata group or even the Tata Trusts. While Noel became a trustee of the two main trusts, Ratan Tata had ensured that his confidantes – Venu Srinivasan, Mehli Mistry and Vijay Singh (also a Tata Trust nominee in the Tata Sons board at that time) dominated the trusts.
Noel has, over the past six months or so, tried to remove these people. Vijay Singh, a former civil servant, chose to leave gracefully. But Venu Srinivasan and Mehli Mistry are determined to oppose Noel in critical things.
Mehli has been ousted from the main trusts but remains a trustee in one of smaller trusts – Tata Education and Development Trust (TEDT). Once Noel made it clear that he wanted Mehli out of the trusts, the latter complained about various alleged wrongdoings and decisions taken by the Trusts with the Maharashtra Charity Commissioner.
Venu Srinivasan had initially sided with Noel in voting against Mehli in the Trust board meetings but has since opposed many of Noel’s proposals once it became clear to him that the latter wants him gone. In fact, Venu was one of the board members who voted for Chandra’s third term and also Tata Sons listing going against Noel Tata.
If Noel Tata manages to stamp his authority over the Tata Trusts, he should not face a problem with the Tata Sons board or with Chandra. But until Noel has to deal with 
Venu and Mehli, he cannot act as ruthlessly against Chandra as his half-brother Ratan did against Cyrus.
Post Script: Is Noel right in trying to remove Chandra? The question is difficult to answer. Chandra had a superb track record but that has been considerably spoilt of late. The new businesses he has steered Tata Sons into – the digital business and Air India – are hemorrhaging cash and there is no quick turnaround in sight. Worse, despite being a TCS lifer before he became Tata Sons chairman, the IT services company has fumbled with Artificial Intelligence.
Noel has a decent track record with the retail business of the Tatas and a claim of being part of the Tata family. On the other hand, while his business has grown and is very profitable, running the group is a different proposition. But he is asking some good questions – as to the future of the new businesses Tatas have got into and are sinking big money in. Also, he is likely to choose another professional to replace Chandra – something that as chairman of the Tata Trusts which together hold 66% of the Tata Sons shares, he has the right to.