Why Noel Tata Can Never Become The Chairman Of Tata Sons

OB Bureau

October 24, 2024 2:18 pm

Noel Tata

New Delhi: For the second time after 13 years, Noel Tata is facing obstacles in becoming the Chairman of Tata Sons. After the demise of veteran industrialist Ratan Tata, his half-brother Noel Tata was appointed Chairman of Tata Trusts, effectively suggesting that the Tata conglomerate will now be under his control. However, it turns out that Noel Tata can never be the Chairman of Tata Sons, the key company in the group that controls more than a dozen other Tata companies.

According to the 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.