Turmoil Returns to the Tata Empire: Internal Rift Deepens a Year After Ratan Tata’s Demise

Mumbai | October 13, 2025, As images of Tata Sons Chairperson N. Chandrasekaran attending the Tata Capital Limited listing ceremony in Mumbai circulated across news wires this week, fresh reports suggest that the industrial giant he leads is now facing one of its most serious internal crises in recent years.

A year after the passing of Ratan Tata, the man who transformed the salt-to-steel conglomerate into a global and technologically advanced enterprise, the Tata Group is once again grappling with boardroom discord and strategic uncertainty.

With ownership of iconic brands such as Jaguar Land Rover (JLR) and Tetley Tea, and as one of India’s key manufacturing partners for Apple’s iPhones, the Tata empire has long been seen as a pillar of corporate stability. Today, however, insiders describe it as “a house divided.”

A Renewed Power Struggle

For months, a bitter power struggle among trustees has been simmering inside the Tata Trusts — the charitable body that holds a 66% stake in Tata Sons. The dispute has reached a level that reportedly prompted quiet government intervention, reminiscent of the public corporate drama of 2016 when then-chairman Cyrus Mistry was ousted.

Although ministers in New Delhi were believed to have brokered a fragile truce earlier this month, recent reports indicate that Mehlli Mistry, one of Ratan Tata’s closest confidants and a long-serving trustee of Tata Trusts, has now been removed from his position. The BBC has not independently verified this claim.

According to Professor Mircea Raianu of the University of Maryland, author of a major corporate history on the Tata Group, the current conflict represents “a resurgence of unfinished business” — centered on a crucial question: Who truly runs Tata?

A Unique, Yet Fragile Governance Model

Tata’s distinctive structure — where a for-profit holding company (Tata Sons) is controlled by a non-profit entity (Tata Trusts) — has long been admired as a model blending philanthropy with enterprise. While the arrangement offers tax benefits and preserves the group’s humanitarian legacy, experts argue it has also become a source of governance tension, given its dual mandate of charity and commerce.

The latest rift comes at a time when the Tata Group is already under immense business pressure — expanding into semiconductors and electric vehicles while simultaneously attempting to revive Air India, the struggling airline it reacquired from the government in 2021.

Disagreement Over Board and Listing Decisions

Though Tata executives have refrained from public comment, insiders suggest that trustees are divided over board nominations, funding approvals, and a potential public listing of Tata Sons, the $328 billion holding company.

Currently, Tata Trusts has three nominees on the Tata Sons board. According to sources, “Trust representatives hold veto power over key decisions, but their role is largely supervisory. However, some trustees are now seeking greater authority over commercial decision-making.”

The Public Listing Controversy

Another flashpoint is the push by minority shareholder Shapoorji Pallonji (SP) Group, which owns an 18% stake in Tata Sons, to take the company public. While some Tata trustees have backed the idea, the majority remain opposed.

“Listing Tata Sons could weaken the Trusts’ long-term strategic control and expose the group to quarterly market pressures,” said one insider, pointing out that many of Tata’s emerging ventures are still in early development stages.

The SP Group, however, has called the move a “moral and social imperative” that would enhance transparency and unlock shareholder value.

Neither Tata Sons nor Tata Trusts have responded to the BBC’s detailed queries on the matter.

Brand Image Under Strain

According to Prof. Raianu, the dispute poses a profound reputational challenge to one of India’s oldest and most respected business houses. “Public listing runs counter to a growing global trend of foundation-owned corporations prioritizing long-term stability and sustainability,” he noted. “Yet, privately held companies often lack external scrutiny, which can fuel internal conflict and damage credibility.”

Former communications strategist Dilip Cherian, who worked closely with Cyrus Mistry, told the BBC, “This adds to a series of blows the Tata image has taken recently.”

The group has faced several setbacks in the past year — including a fatal Air India crash in June, and a major cyberattack in September on a Jaguar Land Rover unit that drove UK car production to its lowest level in 70 years. Meanwhile, Tata Consultancy Services (TCS), the group’s biggest profit engine, is reportedly facing challenges from layoffs and the loss of key contracts such as its partnership with Marks & Spencer

A Legacy at the Crossroads

The Tata Group’s internal rift, emerging just a year after Ratan Tata’s passing, underscores a deeper identity crisis — between philanthropy and profit, tradition and transparency. As India’s most storied conglomerate navigates this volatile phase, the question remains whether the values that built the Tata legacy can withstand the demands of modern corporate capitalism.