Boardroom feud tests trusted Indian business empire

Before dawn breaks over Mumbai, Mansi Kadam begins preparing vada pav, a savoury snack synonymous with the western Indian city, for the day's customers. One ingredient is non-negotiable: Tata salt.

When asked whether she would ever consider switching brands, her reply is a reminder of an old Hindi ad jingle, "If it's salt, it has to be Tata."

She knows little about the developments unfolding in the boardroom of the Tata group, one of India's oldest and most influential business empires that makes everything from salt to software.

But her instinctive loyalty points to a question confronting the group: Can one of India's most trusted brands remain insulated from a public battle over power, governance and control?

A recent public disagreement between the board of Tata Sons, the holding company of the Tata group and Tata Trusts, its principal shareholder, has put a spotlight on the conglomerate.

At the centre of the dispute are two issues - the proposed public listing of Tata Sons and the reappointment of chairman N Chandrasekaran. Most of the Tata Sons board, including its biggest minority shareholder SP Group, supported the decisions.

But Noel Tata, chairman of majority shareholder Tata Trusts, has opposed both resolutions. He maintains that a public listing would dilute the group's philanthropic ethos and is likely to get both decisions overturned at its annual general meeting.

"When we say this is a governance crisis, it's a misalignment of interests between the board [of Tata Sons] and the shareholders [Tata Trusts]," Shriram Subramanian, head of independent corporate governance firm InGovern Research, told the BBC.

While he does not expect the brand's image to be affected immediately, he flags concerns over the leadership's ability to navigate the challenges.

Disagreements within the Tata Group have been simmering since the death of former chairman Ratan Tata - Noel Tata's half-brother who designated him successor after his death - in 2024. For many Indians, Ratan Tata's philanthropy and leadership had become inseparable from the brand. His death triggered widespread mourning and experts say it left a leadership void in the group's image with the public.

The Tata group has topped India's most valuable brand list by valuation consultancy Brand Finance since 2018, according to the group's website.

Tata Sons, the business entity, is described by the group as the "fastener keeping the many disparate elements of the whole together".

Tata Trusts, which represents seven philanthropic trusts that own the majority stake in the group, is widely regarded as its moral compass, guiding the businesses on social impact and philanthropy.

For many Indians, both the entities together make up what most companies cannot buy - trust.

Now with these entities in rival corners, that is coming under strain.

"Once upon a time, there was a unified audience which said the Tatas are good people with good governance. Today, the opinion is divided," said Harish Bijoor, business and brand strategy consultant.

While most consumers appear unfazed, the dispute has polarised other stakeholders including business partners, investors and employees. Some view it as corporate power politics, others as a genuine governance debate, but few agree on which side is right, Bijoor said.

"This conflict has brought the Tatas into conversations everywhere, which is not good as they have always liked to be out of it," he says.

The group has been traditionally preferred being low profile about philanthropy and conflict resolution.

The Tata group did not respond to BBC's email with detailed questions.

Founded by Jamsetji Tata in 1868, the Tata group expanded under JRD Tata who transformed it into a professionally managed conglomerate. Ratan Tata drove its global ambitions through acquisitions.

Tata group, which has a combined market value of more than $260bn (£195.6bn) and employs hundreds of thousands of people in more than 100 countries, is not new to controversies.

The conglomerate has faced protests over industrial projects, scrutiny of its Indian telecom business during a spectrum allocation controversy, a high-profile dispute with Japan's Docomo and, more recently, questions over Air India's performance.

Some of its business decisions have also drawn attention, particularly Tata Steel's troubled Corus acquisition, though other overseas bets such as Tetley and Jaguar Land Rover were successful and helped expand the group's global footprint.

Its biggest controversy was in 2016 when the Tata Sons board abruptly removed Cyrus Mistry as chairman and brought back Ratan Tata as interim head. Mistry, heir to the SP Group, was chosen by a team led by Ratan Tata himself. It led to a long battle which ended in 2021 with the Supreme Court ruling in the Tatas' favour.

Last month, journalist Sucheta Dalal wrote in her column for Moneylife magazine that the Tata group has "weathered serious governance storms" and enjoys "special privileges available to no other business group [referring to a tax exemption granted to Tata Trusts for holding shares in Tata Sons]" because of a reputation built over decades.

Most Tata watchers agree.

In an email interview, Morgen Witzel, a fellow at Exeter Centre of Leadership who wrote a book on the brand in 2010, cited several examples on the group's connection with people.

At Jamshedpur in Jharkhand state, where the group set up India's first integrated steel plant and an industrial city, it provides healthcare and education to people in hundreds of villages. Watchmaker Titan supports employees who want to leave and start their own businesses. Tata Motors at Pune has supported thousands of female entrepreneurs, he points out.

"It is the concatenation of all of these things that builds trust because people see that, by and large, Tata is there to serve their needs rather than just take their money," Witzel said.

But while the group has weathered other storms, this time, the divide is within.

The boardroom tussle has increasingly spilled into the public domain, with Tata Sons and Trusts clashing through legal notices and conflicting statements.

Venu Srinivasan, vice-chairman of Tata Trusts and a nominee director on Tata Sons' board, has sought a probe into alleged governance lapses at some trusts. The trusts deny the lapses.

Noel Tata has made two proposals to avoid listing the company.

First, that the Tata Sons board buy back a portion of SP Group's minority stake as a "fair and equitable solution" to the latter's demand to monetise their stake. Secondly, restructure Tata Sons by merging with itself two businesses which would change the way it is classified by India's central bank, helping the group potentially avoid a listing.

It is not clear whether he can pull this off, given that unlike Rata Tata, he had not consolidated power yet.

"Ratan Tata's larger-than-life image is, to some extent, the reason behind the current conflict. Everyone was deferential towards him and his successor was known only after his death through his will," says Subramanian.

Had Ratan Tata overseen the succession himself, the transition would have been smoother, he says.

Brand expert Bijoor calls for the Tata group to put together a "white paper" on how the conflict plays out in the end. "They stood for transparency, and they must never shed that."

How the influential group manages these tensions may offer a glimpse into its future. The outcome will be watched closely across corporate India, where Tata's governance and business practices have long been regarded as a benchmark.