Noel Tata appointed Chairman of Tata Trusts, says look forward to carrying Ratan Tata’s legacy

Less than forty-eight hours after Ratan Tata passed away, the baton of helming the philanthropic entities that control the Tata conglomerate was passed to his half-brother Noel Naval Tata.

A statement by the Tata Trusts on Friday stated that the unanimous decision to appoint Noel was taken by the trustees of the Tata Trusts, which together hold about 66% of the group’s holding company, Tata Sons Pvt. Ltd.

An executive close to the development told Mint on the condition of anonymity that eight executives of Tata Trusts held two meetings on Friday afternoon. The first was a condolence meeting attended by the trustees of each Tata Trust.

It included Noel Tata; former defence secretary Vijay Singh; Venu Srinivasan, chairman emeritus of TVS Motor Ltd; Jehangir H.C. Jehangir, chief executive officer of Pune-based Jehangir Hospital; Mehli Mistry, a businessman with interests in logistics and dredging; Darius Khambata, a senior advocate; Pramit Jhaveri, former CEO of Citibank India, and Siddharth Sharma, CEO of Tata Trusts.

Each person spoke endearingly about Ratan Tata for about 2–3 minutes.

The second meeting began half an hour later, when Sharma excused himself from the room and left the other seven to decide on Ratan Tata’s successor.

The executive cited earlier said that Noel did not participate in these deliberations and remained quiet.

A statement put out by the Tata Trusts after the meetings stated, “The Trustees of various Trusts that comprise the Tata Trusts met at a joint meeting held in Mumbai today. They condoled the demise of Mr. Ratan N. Tata, Chairman, Tata Trusts, and recalled his yeoman services not only to the Tata Group but also to nation building.”

The statement added, “In separate meetings held immediately, thereafter, it was unanimously decided to appoint Mr. Noel Naval Tata as the Chairman of the various Trusts that constitute the Tata Trusts and also designate him as Chairman, Tata Trusts. His appointment comes into place effective immediately.”

On his part, Noel Tata said in a prepared statement that he was deeply honoured and humbled by the responsibility.

“I look forward to carrying on the legacy of Mr. Ratan N. Tata and the Founders of the Tata Group. Founded more than a century ago, the Tata Trusts are a unique vehicle for undertaking social good. On this solemn occasion, we rededicate ourselves to carrying on our developmental and philanthropic initiatives and continuing to play our part in nation building,” he said.

The executive cited earlier said that the decision to quickly entrust Noel followed Ratan Tata’s wishes of prioritizing institution building over individuals.

This executive added how Noel, who was the managing director of Trent Ltd since 1999 and was its chairman since 2014, was entrusted with additional responsibilities, including that of vice chairman of Titan Ltd in 2018 and Tata Steel in 2022. But the most significant was Noel’s appointment as trustee of Sir Dorabji Tata Trust & Allied Trusts and Sir Ratan Tata and Allied Trusts.

Incidentally, Noel is the single largest individual shareowner of Tata Sons, owning 1% of shares. Ratan Tata owned own 0.83%, and his brother Jimmy owns 0.81%.

Tata Trusts is the umbrella entity that oversees the functioning of all the philanthropic entities of Tatas, including the seven Tata Trusts that together own 65.9% of Tata Sons.

Sir Dorabji Trust and Sir Ratan Tata Trust are the largest shareholders, owning 27.98% and 23.56% of Tata Sons, respectively, as of 31 March 2024. JRD Tata Trust owns 4.01% while Tata Education Trust and Tata Social Welfare Trust own 3.73%. MK Tata Trust owns 0.6% and Sarvajanik Seva Trust owns 0.1%.

The swift action by the Tata Trusts to fill the void underscores the organization’s agility and commitment to maintaining a harmonious relationship between Tata Trusts and Tata Sons, according to a second executive, a city-based consultant, who also wished to remain anonymous.

The Tata group operates under three layers.

At the top are the Tata Trusts, which own 65.9% of Tata Sons; 18.38% of Tata Sons’ shares are owned by the Shapoorji Mistry family, 12.86% by nine Tata Group companies and the remaining 2.87% by seven individuals.

Tata Sons is in the middle layer and is run by Natrajan Chandrasekaran. It also owns shares in about 26 companies, which form the third layer. These companies, such as Tata Motors Ltd, Tata Steel Ltd, and TCS, among others, cumulatively had over $165 billion in revenue and $365 billion in market capitalisation at the end of March 2024.

Also Read | Who is Noel Tata? Ratan Tata’s half-brother who is likely to helm $165-billion empire controlled by Tata Trusts

To Ratan Tata’s credit, according to a second executive, he did try to iron out some of these differences that could have potentially derailed the working relationship between Tata Trusts and Tata Sons.

In August 2022, both organisations brought changes to their articles of association. One significant change was the agreement that no single individual could chair both Tata Trusts and Tata Sons, a rule that paved the way for the appointment of Noel Tata as the chair of Tata Trusts.

“Provided that a person who is the chairman of either the Sir Dorabji Tata Trust or the Sir Ratan Tata Trust or of both, will not concurrently be eligible to be the chairman of the Board of Directors,” read the resolution that was approved by the shareholders of Tata Sons at its Annual General Meeting on 30 August 2022.

However, Tata Trusts also brought another change that gave it the power to appoint or remove the chair of Tata Sons. A five-member selection panel would comprise three members nominated by Tata Trusts, one from Tata Sons, and a fifth member who can be nominated by Tata Sons.

Until the end of last month, Noel Tata was reporting to Tata Sons chairman Chandrasekaran.

According to two executives, the relationship between Chandrasekaran and Noel is no different than that of the head of an operating company with Tata Sons chair. This suggests a professional and collaborative working relationship, which will be crucial in the new arrangement where Chandrasekaran will share the Group company's performance with the Trusts, chaired by Noel.

For now, it is not clear if Noel will continue as chair of Trent and vice-chair of Tata Steel after taking over as Tata Trusts Chair.

Since taking over as first as the managing director of Trent in 1999, Noel had helped steer the company to become an apparel retail giant that ended with ₹12,669 crore in revenue and ₹1,029 crore in FY24. With a market cap of ₹2.9 trillion as of Friday, Trent is the fourth most valuable company of the Tata Group, behind Tata Consultancy Services Ltd, Tata Motors and Titan Ltd.

Jocelyn Fernandes contributed to the story