Noel, Chandra secret truce talks reach no conclusion

Mumbai: Tata Sons chairman N Chandrasekaran and Tata Trusts chairman Noel Tata held a secret meeting on Sunday that was arranged by former group veteran NA Soonawala in a move aimed at resolving the differences that have roiled the leadership of one of India's biggest conglomerates but it ended inconclusively, according to people with knowledge of the matter. Central to their talks were the holding company's listing, a proposed buyout of the Shapoorji Pallonji (SP) Group's stake in Tata Sons and Chandrasekaran's tenure as chairman, they said.

Although the October 25 meeting is said to have ended with a mutual agreement over follow-up dialogue, the next day Noel Tata issued a letter challenging the decisions taken at the Tata Sons board meeting of September 17. He questioned the procedures and voting requirements that led to the approval of Chandrasekaran's reappointment, as well as potential conflicts of interest. He sought recordings of the board meeting and the final minutes and voting records in the October 26 letter, as ET reported previously.

The Sunday meeting is understood to have followed interventions by former Tata executives and some insiders amid concerns over implications of the rift for the group's brand, according to the people who spoke to ET on condition of anonymity. This was the first such meeting between the two sides since the September 17 board meeting, which approved another term for Chandra and backed Tata Sons listing.

Noel Tata had opposed both moves.

Chandrasekharan and Noel Tata did not respond to queries from ET.

Executives close to the matter said former group veterans such as S Ramadorai, Ishaat Hussain and R Gopalakrishnan as well as insiders like Aloo Tata, Noel Tata's wife, and Geetanjali Kirloskar, chairperson and MD of Kirloskar Systems, had encouraged the meeting between the two sides. This could not be independently verified. Aloo Tata is the sister of Shapoor Mistry, chairman of the SP Group. Noel Tata's son Neville is married to Manasi, Geetanjali Kirloskar's daughter.

The meeting was held at Noel Tata's residence in south Mumbai, said the people cited. Chandrasekaran raised concerns about the lack of communication between the two sides and the need to sort out disagreements amicably, they said.

Noel Tata reiterated that Tata Sons should remain privately held and that the SP Group should be offered Rs 25,000 crore through partial monetisation of its 18.4% stake. Chandrasekaran is said to have responded that Tata Sons would consider it and that a listing would complicate the matter. Chandrasekaran is understood to have said the listing decision was not within his control and was mandated by regulatory requirements imposed by the Reserve Bank of India (RBI).

The SP Group, led by Shapoor Mistry, has backed a listing as a way to improve transparency and monetise its investment. The Tata Trusts, which hold a majority stake in Tata Sons, oppose the listing and have said alternatives should be considered.

The RBI had rejected Tata Sons' proposal to surrender its registration as an upper-layer non-banking financial company. That meant it was subject to rules requiring such entities to list within three years of classification.

Noel Tata is also understood to have raised the matter of Chandrasekaran's reappointment and that he should retire at 65, in line with the group's policy. Chandrasekaran indicated he would abide by the policy but said he needed to complete the major projects that are underway such as those at Tata Electronics, Air India and Tata Digital, the people said. Noel Tata is understood to have said that he could take the reappointment issue to court if it remained unresolved.

People aware of the discussions said that the chairman of Tata Sons was keen to pursue an amicable resolution of the rift and not prolonging the impasse.

"The big picture was that the Tata Group is bigger than individuals and must be protected," said one of the persons who spoke to ET.

Noel Tata, however, is keen that the key concerns raised by him should be addressed by Tata Sons. "Tata is determined that the issues raised are valid and cannot be sidelined," said the person cited.

The Tata Sons board had reappointed Chandrasekaran for a second five-year term beginning February 2027, with Noel Tata casting the sole dissenting vote. Chandrasekaran's current term ends on February 20, 2027.

Noel Tata has also raised with the Tata Sons board the issue of investments exceeding Rs 100 crore in group subsidiaries requiring his approval, the people said. This could raise questions about the respective powers of the Tata Sons board and those of the Tata Trusts, which collectively owns about 66% of the holding company.

Legal experts said dialogue remained a way to resolve the dispute, while noting that legal action could be initiated if there were violations of the law.

"The best course of action is to settle the matters through mutual discussion and conciliation," said Ashish K Singh, managing partner at Capstone Legal. "Even courts encourage out-of-court settlement of disputes in matters which involve multiple stakeholders and are in tune with principles of corporate governance."

Multiple notices won't be needed before initiating legal action, said a senior lawyer. "If there is an infraction of law, the court can be approached directly without any delay," he said.