Is Noel Tata, the half-brother of late Ratan Tata now the most powerful person in Tata Group?. In a way, yes. As the Chairman of Tata Trusts Noel Tata will wield sweeping powers over Tata Sons as the trusts hold the controlling stake in the company.
Noel Tata, the half-brother of Ratan Tata, has been chosen as the new Chairman of Tata Trusts, after the elder Tata, who was the Chairman Emeritus of the Tata Group, passed away on October 9, 2024 at the age of 86. After Ratan Tata’s death, Noel Tata, 67, has been picked by the board to lead Tata Trusts, which essentially owns Tata Sons, having a 66 percent stake in the holding company which runs the Tata Group, essentially making Noel, the single most powerful person in the Rs 34 lakh crore Tata business empire.
The Tata Group, established by its founder Jamshedji Nasirwanji Tata in 1868 when he bought a bankrupt oil mill for Rs 21,000, a massive amount at the time, and turned it into a cotton factory, has today grown into a global juggernaut with over 100 companies spread in more than 100 countries, boasting a market cap of $403 billion (roughly Rs 33.7 trillion).
Tata Sons, Tata Group, and Tata Trusts – What’s the difference?
In simple language, Tata Sons is the parent company of Tata Group, which consists of over 100 operating companies. Tata Sons is essentially controlled by Tata Trusts– an umbrella company of 14 trusts– thanks to its massive 66 percent stake in the group. Without getting too technical, Tata Sons is the holding company that owns the majority of the Tata Group’s shareholding, including land, tea estates, and steel plants. Tata Sons derives revenue from dividends and brand loyalty fees.
On the other hand, Tata Trusts is an umbrella company under which as many as 14 trusts engaged in philanthropic ventures in fields such as art, culture, education, health, and livelihood generation, operate. Tata Trusts has a combined 66 percent stake in Tata Sons, making it the majority shareholder of the company.
Tata Trusts has two main trusts — Sir Ratan Tata Trust and Sir Dorabji Tata Trust– having a combined 52 percent stake in the company. Other trusts running under Tata Trusts have a combined stake of 14 percent, and as such Tata Trusts, which has a 66 percent stake in the Tata Sons.
Tata Trusts – Who are the trustees?
As per available information, Tata Trusts has 13 trustees at present Sir Ratan Tata Trust and Sir Dorabji Tata Trust, out of which five persons are trustees of both trusts. They are; Former Defense Secretary Vijay Singh, TVS Group’s Venu Srinivasan, Ratan Tata’s step brother Noel Tata, businessman Mehli Mistry and lawyer Darius Khambatta.
Former Citi India CEO of Sir Dorabji Tata Trust Pramit Jhaveri, Ratan Tata’s younger brother Jimmy Tata and Jehangir H.C., the CEO of Jehangir Hospital of Sir Ratan Tata Trust, are the other trustees.
How powerful is Tata Trusts?
Owing to its controlling stake in the company, Tata Trusts essentially wields absolute power in Tata Sons, which controls Tata Group. No decision can be taken by Tata Sons without the approval of Tata Trusts, making it the ultimate controlling body of the conglomerate. As per group rules, the two main trusts can nominate one-third of the directors of Tata Sons and have the final authority to appoint and remove all directors.
Notably, these sweeping controls were given to the the two trusts when Ratan Tata changed the rules of the group upon his retirement from the post of Chairman in 2012. These changes became possible when the Central Government made made changes in the Companies Act, allowing Tata Trusts to vote directly in the Tata Sons board.
Is Noel Tata now the most powerful person in Tata Group?
In a way, yes. As the Chairman of Tata Trusts Noel Tata will wield sweeping powers over Tata Sons as the trusts hold the controlling stake in the company.
However, it’s also worth noting that Noel Tata does not personally own these 66 percent shares of Tata Sons, they are owned by the trusts. His personal stake in the company is a different topic.