Senior advocate Darius Khambata has decided not to seek another term as a trustee of two of the most influential charitable institutions within the Tata Group, while raising serious concerns over the company’s governance, its engagement with the Reserve Bank of India (RBI) and the future of Tata Sons.
In a letter dated November 2 addressed to Tata Trusts chairman Noel Tata and chief executive Siddharth Sharma, Khambata communicated his decision to step down from the Sir Dorabji Tata Trust (SDTT) and the Sir Ratan Tata Trust (SRTT). His decision comes at a time when differences over the leadership and ownership structure of Tata Sons have become increasingly visible.
Khambata’s term at the Sir Dorabji Tata Trust is due to end on November 9, while his tenure at the Sir Ratan Tata Trust concludes later this month. He had joined both trusts in November 2018 at the invitation of the late Ratan Tata.
Although Noel Tata and Sharma had expressed a wish for him to continue, Khambata said he did not want to seek the approval of fellow trustees for reappointment. Since the process requires the consent of all other trustees, he felt that seeking such approval could affect his independence.
He said his positions had sometimes differed from those of Noel Tata, but appreciated that the differences had been accepted. Khambata described this approach as reflecting the traditional values of the Tata Group, where disagreement should not prevent independent views from being expressed.
A major part of his letter focused on the September 17 meeting of the Tata Sons board, which approved a five-year extension for chairman N Chandrasekaran. Khambata strongly criticised the developments surrounding the decision, saying they had damaged the reputation of Tata Sons and affected the image of corporate India.
Referring to September 17 as a day that would remain infamous, he questioned whether the board would have acted in the same manner had Ratan Tata been alive. He argued that the interests of the institution should take priority over individual positions and that leadership decisions should be guided by consensus and respect.
The September meeting exposed differences among directors nominated by Tata Trusts. Chandrasekaran’s reappointment went ahead after a split in their positions. Noel Tata opposed the decision and recorded his dissent, while Venu Srinivasan supported the chairman’s continuation. Noel Tata subsequently questioned the legality of the reappointment.
Khambata also expressed disappointment with the outcome of the Tata Trusts’ engagement with the RBI over Tata Sons’ regulatory status. He said the discussions had not meaningfully addressed how the company could adopt the transparency and disclosure standards expected of a listed entity while continuing to remain outside the applicable regulatory framework.
The issue is linked to Tata Sons’ status as a core investment company (CIC). The company had applied to surrender its registration with the RBI, a move intended to help it retain its unlisted status. However, the regulator rejected the application in September, bringing the question of a possible stock market listing back into focus.
Tata Trusts, which collectively hold around 66% of Tata Sons, have opposed listing the holding company. They have maintained that the company should explore legally permissible alternatives rather than move towards an initial public offering.
One proposal involved restructuring Tata Sons through a merger with group companies Tata Electronics Systems Solutions and Tata Consulting Engineers. The plan was aimed at changing its structure from a holding company into a holding-cum-operating entity, potentially taking it outside the regulatory framework that could require a listing.
However, the proposal has triggered disagreements among trustees, with concerns raised over the decision-making process and the possible implications for the charitable trusts. Khambata questioned whether the proposed arrangements could adequately address the regulatory requirements.
He also defended the private ownership structure of Tata Sons, arguing that it had allowed the group to take long-term business decisions without being driven solely by quarterly earnings or short-term shareholder expectations.
He cited investments in Air India and the semiconductor sector, along with support extended to loss-making businesses and the repayment of depositors of Tata Finance. According to him, a publicly listed Tata Sons could find it difficult to make similar commitments under pressure to deliver returns within shorter periods.
Khambata reiterated that opposing a listing should not mean ignoring the financial requirements of the Shapoorji Pallonji Group, the minority shareholder in Tata Sons. He supported providing liquidity to the debt-laden group through the sale of some or all of its shares, rather than treating a public listing as the only possible solution.
His letter also revisited earlier decisions taken by the trusts. Khambata said he had drafted a July 28, 2025, resolution opposing the listing of Tata Sons, which was passed unanimously. He had earlier described a potential listing as an existential concern for the charitable trusts because of its implications for the relationship between the holding company and its philanthropic owners.
He questioned the subsequent change in position by trustees Vijay Singh and Venu Srinivasan, who supported listing in April 2026 despite having earlier backed resolutions against it. He said the shift had not been adequately explained to fellow trustees.
The dispute is significant because Tata Trusts are central to the group’s ownership structure and philanthropic activities. Khambata argued that the industrial and charitable arms of the Tata model should not be separated, describing their relationship as essential to the institution’s identity.
He concluded by urging the leadership to preserve the legacy built by the group’s founders, saying positions should be secured through consensus rather than strategy or personal influence. His departure adds another dimension to the continuing debate over Tata Sons’ leadership, governance and possible listing.