These days, if you have a billion dollars, you can say anything and people will think it is wisdom. Jack Ma, the co-founder of Chinese e-commerce giant Alibaba, used to talk a lot, and candidly, which is rare for an Asian billionaire.
Less than two weeks before the giant initial public offering (IPO) of his financial company, Ant, he criticized China’s financial regulators. Soon afterwards, the IPO was cancelled. Ma eventually lost control of the company. Alibaba itself came under investigation. Then, Ma disappeared for months. When he reappeared he was not so candid anymore.
Beijing had sent a signal to all its billionaires and the world that the Communist Party ran the show and that private enterprise was not entirely private. “This is India’s Alibaba moment,” says a top executive who works closely with Noel Tata, chairman of the Tata Trusts that have a 66% stake in Tata Sons.
It may not be a perfect metaphor, but I don’t think it is much of an exaggeration either. A coup has taken placed inside Tata Sons, the holding company of India’s largest business group. There are brooding whispers of political influence behind it. A brand that Indians trust appears to be under attack from a brand with which Indians have a more complicated relationship.
On the surface, this is what appears to be going on. Noel Tata, the relatively new chairman of the group’s charitable trusts, has lost control of Tata Sons’ board, which, led by N. Chandrasekaran, has isolated him.
There is division within Tata Trusts too. With this, the Trusts that have traditionally exercised control over the holding company are finding their authority challenged by the professional managers and directors, two of whom they themselves had appointed.
Some people may say India’s political dispensation had nothing to do with it, but I am yet to meet anyone who believes this.
This is what I gather is actually going on. Noel Tata sees Chandrasekaran as a part of the legacy of the group’s former patriarch, the late Ratan Tata. Ratan and Noel, half-brothers, did not have a great relationship. As long as Ratan controlled the group, Noel was eclipsed.
On the other hand, Chandrasekaran thrived. Last fiscal year, he drew over ₹158 crore in annual compensation. After the demise of Ratan Tata, Noel took over the Trusts, and he questioned the business record under Chandrasekaran. Last year, Air India lost over ₹22,000 crore and Tata Digital lost nearly ₹5,000 crore.
In August, it seemed that Chandrasekaran felt he had no cards against the new chairman of Tata Trusts, and since Noel Tata did not want him given a third term in his role, he decided to leave when his current term ended in February 2027. But something happened in the weeks after that. On 17 September, everyone on the board, except Noel Tata, asked Chandrasekaran to stay on.
People tell me that in the vacuum of stature that Rata Tata’s departure created, powerful people saw an opportunity to take control of a vast business empire. A few days ago, Chandrasekaran reportedly called for a new university with a curriculum that blended “Hindu shastras” with artificial intelligence. Even though I do not know what he is talking about, this is the sort of stuff that’s music to the ears of India’s ruling party.
In contrast to this, the old-world charm and anglicized refinement of the Tata family may suggest that they might be culturally distant from India’s ruling elite. But, an insider tells me, many rich Parsis are right-wing. And not just today. A prominent Parsi doyen funded the right long before it achieved power. “So that’s not the issue here,” says the insider.
Whether politics had a role in the Tata coup is not as important as perceptions among some observers of political games being played in the background and of the Tata Group being yet another Indian institution whose independence is no longer guaranteed. Opposition leader Rahul Gandhi recently suggested that Tata Consultancy Services was pressured into doing something shady for the Election Commission of India’s software systems.
The men on both sides of the Tata dispute claim high principles as the reason behind their actions. For instance, transparency is at the heart of one of the issues the group is split over. Tata Sons, which owns stakes in many companies whose shares are publicly traded, is not listed. All Tata patriarchs wanted it that way. Including Ratan Tata.
Chandrasekaran is also thought to have held this view until recently. The Reserve Bank of India wants a financial company of such significance to go public so that it meets higher norms of disclosure on its business affairs.
But the Tatas never wanted it, chiefly because a listed company is under pressure to meet short-term financial objectives, while they wanted Tata Sons to think long term without being flustered by monetary upheavals. They also wanted to keep dividends flowing for charity. Noel Tata has repeated this.
Tata’s stated reasons for not listing are not persuasive. Mark Zuckerberg, who controls Meta via shares with outsized voting power, makes costly long-term bets, like he did on the metaverse and is doing on AI, even if the market punishes Meta’s stock for these.
With a 66% stake in Tata Sons, the Trusts needn’t lose control of it once a quarter of its equity floats. The equity arithmetic suggests the company could still choose to make long-term bets and yield payouts for charity. Yet, for some reason, Noel Tata does not want it going public.
The author is a journalist, novelist and screenwriter. His latest book is ‘Why the Poor Don’t Kill Us.’