Mumbai, India – The six Tata Trusts, which collectively hold a significant 66% stake in Tata Sons, have reportedly filed caveats before the Maharashtra Charity Commissioner. This pre-emptive legal measure aims to ensure that no adverse directives are issued against the trusts without their side of the story being fully heard.
The filing comes in the wake of formal complaints lodged by two prominent trustees, Venu Srinivasan and Vijay Singh. Both have raised serious concerns regarding the governance of the trusts and their perceived overreach into the commercial and strategic operations of Tata Sons.
Trustees Raise Governance Concerns
Venu Srinivasan, who serves as vice-chairman of Tata Trusts and a trustee of the Sir Dorabji Tata Trust (SDTT), submitted his complaint to the charity commissioner on September 24. He sought a comprehensive inquiry into SDTT's governance and its engagement in the commercial and strategic decisions of Tata Sons.
Similarly, Vijay Singh, also a vice-chairman of Tata Trusts and an SDTT trustee, conveyed comparable concerns to the commissioner around the same time. Both trustees have highlighted that while the trusts hold a substantial shareholding in Tata Sons, this should not translate into them operating as commercial entities or directly influencing the business affairs of Tata Sons. They also flagged potential tax implications for the trusts' charitable corpus due to such involvement.
Context and Previous Actions
Srinivasan's complaint followed the Tata Sons board's resolution on September 17, which endorsed N Chandrasekaran for a third term as chairman. The filing of these caveats by the Tata Trusts is also seen as a move to prevent a recurrence of an ex parte order issued in May.
In that prior instance, the charity commissioner had instructed the Sir Ratan Tata Trust (SRTT) board to postpone a meeting and refrain from further gatherings until an inspector's report was submitted. This earlier action stemmed from complaints concerning SRTT's board composition and alleged non-compliance with Section 30A(2) of the Maharashtra Public Trusts Act.
Legal Basis and Demands
The caveats filed by SDTT, the largest Tata Sons shareholder, and the other five trusts invoke Sections 41D, 47, and 41E of the Maharashtra Public Trusts Act. These sections pertain to critical issues such as the removal or suspension of trustees and restrictions on dealings in trust property.
Specifically, Srinivasan has requested an inquiry into SDTT and called for the trust to be barred from holding meetings. He also sought a freeze on any changes to its board and the suspension or removal of trustees if violations are identified. Furthermore, he requested limitations on Noel Tata's involvement in certain key decisions concerning Tata Sons.
The submissions from both Srinivasan and Singh are currently under active consideration by the Maharashtra Charity Commissioner, marking a significant development in the ongoing governance discussions within the Tata Group's foundational entities.