Tatas, a house bitterly divided: Trust orders gag, but Venu breaks ranks on Tata Sons' listing

MUMBAI: Hours before Tata Sons' board was due to meet to weigh a Reserve Bank of India order pushing it towards a stock market listing, an open war broke out between its largest shareholder, Tata Trusts, and the man they'd appointed to represent them.The Sir Dorabji Tata Trust (SDTT) passed a late Wednesday night resolution seeking to bar its own nominee director, Venu Srinivasan, from speaking or voting on Tata Sons' listing at Thursday's meeting. Srinivasan, who refused to abide by the restriction, calling it non-transparent and illegal, said he was a joint nominee of the principal shareholders - SDTT and Sir Ratan Tata Trust (SRTT) - and hence SDTT had no authority to act alone. He also said that he had "statutory and fiduciary duties" to Tata Sons.SDTT's resolution argued Srinivasan's position broke ranks with a stance the trustees unanimously adopted in July 2025, when they directed the Tata Sons chairman to use his "best endeavours" to keep the company unlisted. Srinivasan, the Trust said, had publicly backed a listing subsequently - arguing it could unlock value for minority shareholders and give Shapoorji Pallonji Group an exit - putting him at odds with the SDTT resolutions of July 28, 2025. The resolutions had also suggested a dialogue with the SP Group to provide them a route to offload their stake in Tata Sons, said the SDTT circular.The resolution to bar Srinivasan, chairman emeritus of TVS Motor, was passed by majority vote among SDTT trustees, including Tata Trusts chairman Noel Tata, Darius Khambata, Noel's son Neville, and Bhaskar Bhat, said people familiar with the matter.Srinivasan did not take part, since the resolution concerned him. The position of trustee Vijay Singh could not be independently ascertained.SDTT communicated the resolution to Tata Sons and asked that it be placed before the board. Srinivasan’s conflict with the Trust has raised a debate among legal experts: a Trust can instruct its nominee on how it would like him to vote but can it enforce that instruction, because a nominee director’s first duty is to the company, and only then to the shareholder who nominated him, as pointed out by Srinivasan himself?The counter-view to that is that the nomination mechanism presupposes that a director represents the shareholder that placed him on the board.The fiduciary duty to the company is legally correct but Tata Sons’ articles of association, which created that mechanism, also set the terms on which the director sits, and SDTT’s resolution is arguably an exercise of that architecture, not an override of it. Srinivasan did not accept the restriction. Apart from backing the move to initiate steps to comply with RBI guidelines, Srinivasan ended up voting on Thursday along with three other Tata Sons board members in favour of Chandrasekaran’s reappointment. In an email reply sent early Thursday, he said he was “surprised and disquieted” by the manner and timing of SDTT’s resolution, which he said had been rushed through and communicated to him at the last hour, leaving no real chance to respond before it took effect.He argued that SDTT had no authority to act alone. He had been nominated jointly by SDTT and SRTT, he said, and any restriction on him would require both Trusts’ agreement— not one acting unilaterally. Separately, he invoked his duties as a Tata Sons director: nomination by the Trusts did not exempt him from statutory, fiduciary obligations to the company and its stakeholders, he said, calling SDTT’s attempt to “disenfranchise” him —without notice, deliberation or a hearing—“procedurally infirm and invalid,” driven by “presumptions and a pre-conceived agenda rather than an objective assessment”.Srinivasan told the trustees he considered the resolution illegal and without authority, and said he would take part in board deliberations and vote on matters before it—including Tata Sons’ response to RBI’s order. He asked company to place his response on record and circulate it to fellow directors.Get the latest Business News and Live updates. Download the TOI app.