In a fresh new turn, the Tata Trusts has challenged the validity of Tata Sons’ September 17 decision to reappoint N. Chandrasekaran as chairman. The trust says in its latest statement that the company’s Articles of Association require affirmative support from a majority of its trust-nominated directors and that a chairman’s casting vote cannot override that condition.The 158-year-old Tata Group is no stranger to corporate battles. It also has a history of winning them.When Ratan Tata inherited the chairmanship from J.R.D. Tata in 1991, he faced some of the most powerful corporate satraps India had ever produced. Russi Mody at Tata Steel, Darbari Seth at Tata Chemicals and Tata Tea, and Ajit Kerkar at Indian Hotels commanded enormous influence and often ran their companies with considerable autonomy as chairmen of their respective boards. The first decade of Ratan Tata’s leadership was spent consolidating authority, creating a unified group structure, raising stakes in Tata-listed entities, and establishing himself as the unquestioned centre of power.It was neither easy nor bloodless but Ratan Tata prevailed. By the time he stepped down, the Tata Group spoke with one voice.Then came the ouster of Cyrus Mistry in October 2016, personally supervised by Ratan Tata, who ran the group with an iron hand. The long legal battle that followed ended with Mistry ultimately losing.Today, less than two years after Ratan Tata’s death, the Tata Group is facing yet another period of strain.The dispute over executive chairman-turned-rebel N. Chandrasekaran’s reappointment, the RBI’s handling of Tata Sons’ application to exit the upper-layer non-banking-financial-corporation framework, the prospect of a mandatory listing, and the unresolved position of the Shapoorji Pallonji Group’s stake in Tata Sons have combined to create one of the most significant challenges in the history of the Tata Group.Noel Tata’s challengesAt the centre of this storm stands Noel Tata, scion of the Tata family. For decades, Noel Tata remained outside the glare of public attention – thanks largely to Ratan Tata’s dislike of his half-brother.Now, as chairman of Tata Trusts, the controlling shareholder of Tata Sons, Noel Tata occupies the most influential position in the Tata ecosystem. The coming months will determine not only the future of Tata Sons but also Noel Tata’s legacy as a leader.While the immediate trigger for the latest controversy has been the reappointment of N. Chandrasekaran and listing of Tata Sons – the holding company of the Tata group, what makes the episode remarkable is that Noel Tata first faced a rebellion from members of the old guard close to Ratan Tata within the trusts and is now confronting resistance from the Tata Sons board. Noel Tata is a nominee director on the board of Tata Sons, along with Venu Srinivasan, another nominee director. Srinivasan was close to Ratan Tata and wielded immense influence during Ratan Tata’s tenure.Despite Noel Tata’s objections, the Tata Sons board decided to move ahead with Chandrasekaran’s reappointment for another five-year term. The extension breached a retirement policy that had been in place within the Tata Group for decades. Even Ratan Tata relinquished his executive responsibilities after turning 65. Tata Sons’ dissenting directors will therefore have to explain why they considered it appropriate to grant Chandrasekaran another five-year term. Many of these rebel directors themselves face reappointment in the coming months, and securing another term may become more difficult after last week’s rebellion. The trusts jointly own 66% stake in Tata Sons, and hence the fate of Chandrasekaran and other directors appear to be sealed.Supporting the Tata Sons directors in this summer rebellion is Venu Srinivasan. The Tata Trusts’ nominee directors possess veto rights over certain Tata Sons decisions. Tata Trusts reportedly withdrew Srinivasan’s authority to vote at last week’s board meeting, but according to a report by Moneylife, he nevertheless voted in favour of Chandrasekaran’s reappointment and listing of Tata Sons. Venu Srinivasan term at Sir Ratan Tata Trust ends in December this year and his tenure at Sir Dorabji Tata Trust ends in another two years.According to a Tata Sons statement, the issue of Chandrasekaran’s appointment remained unresolved for months before the board ultimately approved his reappointment through a majority vote on Thursday. This was despite Chandrasekaran himself resigning a few weeks ago – a point made by Noel Tata at the board meeting. And now, a statement from Tata Trusts challenges this decision.Also read: Tata Sons is Losing its Chairman. It Can’t Afford to Lose its Way.The controversy raises a larger question. What changed? The directors, trustees and advisers involved were largely the same individuals who had worked together under Ratan Tata’s stewardship. Yet after Noel Tata assumed the chairmanship of Tata Trusts, differences that had remained hidden suddenly became visible.SideliningThis appears to be a struggle over the future balance of power within the Tata Group. It is well known that during Ratan Tata’s final months, when his health was deteriorating, few power centres were effectively managing the group’s affairs. After Noel Tata’s appointment, many of these individuals appear to have felt sidelined.The RBIThe second fault line concerns the Reserve Bank of India. Few outside the financial sector appreciate how deeply the RBI’s decisions have influenced the current situation. Under Ratan Tata’s guidance, Tata Sons spent years reducing debt and restructuring its affairs in the expectation that it could eventually move away from the regulatory framework applicable to large core investment companies. Instead, the application process dragged on for nearly two years.By the time a decision emerged, the regulatory environment had evolved, and Tata Sons found itself facing the prospect of a mandatory listing after the RBI reportedly rejected its application only days before Thursday’s board meeting. The sudden pace of action after two years of regulatory silence came as a surprise.Regulators have every right to enforce rules and protect financial stability. But large institutions also require regulatory certainty and clear explanations for regulatory actions. Businesses make decisions based on prevailing rules and expectations. When outcomes change after years of engagement, questions inevitably arise about predictability.The RBI may have acted fully within its powers. Yet few would dispute that the prolonged uncertainty has contributed significantly to the current turbulence. The episode also raises questions about the ease-of-doing-business framework that the Modi government has sought to promote.The SP GroupA third issue is the position of the Shapoorji Pallonji Group.For decades, the SP Group has held an 18.37% stake in Tata Sons. It is one of the largest minority holdings in Indian corporate history.Yet despite owning nearly a fifth of the company for decades, the group has found it difficult to unlock value from that investment, particularly at a time when it is facing significant financial pressures. The desire for liquidity is neither unusual nor unreasonable. Every shareholder is entitled to seek an exit at a fair valuation.Indeed, one of the strongest arguments in favour of listing Tata Sons is that it would finally provide a transparent market mechanism through which the SP Group could monetise its investment. Noel Tata has already tabled a plan proposed by SP group at Tata Sons board meeting that would give an exit to the SP group with partial sale of stake at Rs 25,000 crore. This porposed transaction would be big reprieve for the SP group though the SP group has welcomed the RBI’s listing decision on September 18. The RBI move would put the SP group in a strong position if the settlement talks between the SP group and the Tatas are initiated.What is interesting is that when discussions around a potential listing first gathered momentum, market conditions were far more favourable. Since then, TCS, the single largest contributor to Tata Sons’ value, has witnessed a significant correction in market capitalisation.At the same time, some of Tata Sons’ most ambitious investments are generating substantial losses. This was one of the concerns reportedly raised by Noel Tata while evaluating Chandrasekaran’s tenure.Air India continues to consume enormous amounts of capital as it undertakes one of the most ambitious airline turnarounds in global aviation history. Tata Digital, despite its strategic importance, remains a cash-guzzling enterprise as it builds scale and attempts to compete in India’s fiercely competitive digital marketplace.These investments may or may not create value over the long term. But in the short term, they weigh heavily on consolidated earnings and investor perceptions.As a result, any Tata Sons listing today could occur at a valuation materially lower than what many shareholders might have expected a year or two ago. That creates an uncomfortable paradox. A listing may provide liquidity for the SP Group, but it may not necessarily deliver the valuation that shareholders would ideally want. This is why the current debate is also about about who controls the future direction of the group.Philanthropy and accountabilityFor Noel Tata, the challenge is even broader because the Tata Trusts were not just established to hold shares in corporate entities but support hospitals, educational institutions, scientific research, community development and social welfare initiatives across India. Thus, the dividends flowing from Tata Sons finance some of the country’s most important philanthropic activities. That mission should remain paramount. Noel Tata has already committed himself to the charitable vision established by the founders of the Tata Group.If internal disagreements begin consuming the time and attention of trustees, directors and management teams, the ultimate losers will not be limited to shareholders but the millions of Indians who benefit from the philanthropic activities supported by the trusts.As a leader, Noel Tata must now establish clarity and see to it that those entrusted with stewardship of the Tata legacy are aligned on fundamental objectives. No great institution can function amid indefinite internal conflict.With the matter now set to reach the courts, Noel Tata should take a leaf out of Ratan Tata’s books. A complete clean up of the stables is required to get rid of vested interests from the trusts as well as Tata Sons. The Tata name is one of India’s most respected institutions. It was built over generations through trust, credibility and public service. May it survive the rebellion of 2026.