MUMBAI: In a dramatic escalation of internal divisions, Mehli Kersasp Mistry, the reclusive industrialist and longtime confidant of the late Ratan Tata, was effectively ousted from the boards of two key Tata Trusts after a majority of trustees voted against his reappointment to the boards of the Sir Dorabji Tata Trust (SDTT) and the Sir Ratan Tata Trust (SRTT), the two cornerstone trusts of Tata Trusts that control a commanding 66 per cent stake in Tata Sons, the holding company of the sprawling Tata Group.

The decision, finalized through a circular resolution last week, signals deepening rifts within the philanthropic powerhouse that controls a 66 percent stake in Tata Sons, the holding company of the $150-billion Tata Group.

Mistry, 65, whose three-year term expired today, faced opposition from Chairman Noel Tata, Vice-Chairman Venu Srinivasan of the TVS Group, and former Defence Secretary Vijay Singh. At the SDTT, supporters Darius Khambata and Pramit Jhaveri voted in favor, but with Mistry unable to vote on his own renewal, the tally ended 3-2 against him. 

At the SRTT, Khambata and Jehangir H.C. Jehangir backed him, resulting in a 3-3 tie (with Jimmy Tata abstaining), which under the Trusts' consensus-based framework effectively blocked his continuation. Together, SDTT and SRTT hold 51 percent of Tata Sons, amplifying the stakes of this boardroom showdown.

The ouster stems from tensions that boiled over last month, when a Mistry-led bloc—including Khambata, Jhaveri, and Jehangir—opposed Singh's reappointment as Tata Trusts' nominee director on the Tata Sons board, shattering the group's tradition of unanimous decisions. Singh resigned shortly after in mid-September, prompting retaliatory votes. This marks the second major departure from consensus in recent months, following the unanimous reappointment of Srinivasan as a lifetime trustee earlier this week, with Mistry's conditional support.

A Profile in Discretion: From Family Ties to Tata Inner Circle

Born into the influential Parsi business lineage as the son of Pallonji Mistry's brother and first cousin to the late Cyrus Mistry—ousted as Tata Sons Chairman in 2016, Mehli Mistry distanced himself from the high-stakes Shapoorji Pallonji (SP) Group's 18.37 per cent stake in Tata Sons. Heading the (relatively lesser-known) niche 90 years old M.Pallonji Group of Companies, with interests in industrial coatings, dredging, shipping, logistics, pharmaceuticals, and auto dealerships, Mistry maintained low-key ties to Tata entities, including contracts with Tata Power. 

His ascent to Tata Trusts in November 2022, amid post-Jamsetji Tata centenary reforms, was propelled by an unbreakable bond with Ratan Tata. Colaba neighbors for decades, Mistry served on Ratan's private office, RNT Associates, and was named an executor of his will—receiving heirloom guns as a poignant token of trust. During the 2016 Tata-SP feud, Mistry publicly aligned with Ratan, earning SP accusations of bias, which he denied. "I’ll do whatever he wants me to do. I have to secure his interests at all times," Mistry once confided, underscoring his role as the doyen's shadow advisor.

Elevated to executive committees of SDTT and SRTT, Mistry advocated for governance enhancements, such as transparency under Tata Sons' Article 121A, and supported Noel Tata's chairmanship after Ratan's October 2024 passing. Yet, his insistence on reciprocal unanimous renewals—seen in his October 21 approval of Srinivasan's lifetime role—alienated the Noel Tata faction, who perceived it as overreach.

Governance Clash: Legal Battle Looms Over 'Lifetime' Trusteeship

Legal interpretations fuel the fire. A 2024 Trusts resolution promised "lifetime trusteeship" post-renewal, but Mistry's allies argue vetoes violate this; opponents, led by Noel Tata, demand active consensus. Sources indicate Mistry may challenge the ouster in court, potentially withdrawing his Srinivasan nod and escalating to the National Company Law Tribunal — evoking echoes of the prolonged Tata-SP litigation.

The infighting, which reportedly prompted Tata leaders to brief Home Minister Amit Shah last month, risks destabilizing the group's Rs 25 lakh crore market cap ecosystem, from TCS to Tata Steel. With healthcare funding reviews pending and Tata Sons' potential IPO looming under RBI scrutiny, the 3-3 split could stall decisions. "This isn’t just personal it’s a battle over fiduciary duties," a governance expert noted.

Philanthropy watchers decry the "ticking time bomb" for urban India, as the Trusts channel billions into education, health, and livelihoods annually. Tata Trusts declined comment, but insiders affirm resilience: "Divisions exist, but the Tata ethos endures." As Mistry retreats possibly to his Breach Candy Hospital Trust, bolstered by Tata's Rs 500 crore infusion—the empire he helped steward braces for what may be its next defining chapter. In a legacy forged on trust, today's vote reveals its fragility when loyalties fracture.