For over half a century, an invisible shadow has hung over the House of Tatas: The possibility of a hostile takeover. Last Thursday, the custodians of one of India’s most respected and largest business conglomerates feared their worst nightmare could eventually unfold. At Thursday’s Tata Sons board meeting, a majority of members, including a nominee of the Tata Trusts, businessman Venu Srinivasan, defied the chairperson of the Tata Trusts and a Tata family member, Noel Tata, to vote to retain the services of N Chandrasekharan as executive head of the group.

The rebellion reflects the vulnerability of the venerable 158-year-old business house, founded by the visionary Parsi businessman Jamsetji Tata, which was at the forefront of India’s industrial revolution and whose brand name is synonymous with honourable business practices and quality products.

Apprehensions of a future change in ownership first surfaced in 1969 after the government introduced the Monopolies and Restrictive Trade Practices Act under which companies could no longer be run by a managing agency. Tata Sons, the group’s managing agency, appeared to lose its relevance as its shareholding in the group’s companies was minimal. The actual owners of most of the listed Tata companies were family charitable trusts, most notably the Sir Dorabji Tata and the Sir Ratanji Tata trusts. The snag is that under Section 153 A of the Companies Act of 1956, the charities commissioner is expected to appoint a public trustee to act on behalf of charities in corporate........

© Indian Express