Tata Trust Controversy: These days, all is not well at the Tata Trusts, the most important part of the Tata Group. A major controversy has arisen regarding the functioning of Sir Dorabji Tata Trust (SDTT). The Maharashtra Charity Commissioner has issued a notice to Noel Tata and others associated with the trust. The commissioner has given strict instructions to all to file their reply by October 19. The entire matter has come to light following a complaint by two important members of the trust, Venu Srinivasan and Vijay Singh. Both have questioned the governance of the trust and demanded an immediate probe. Earlier, Noel Tata had sought an additional two weeks from the October 12 deadline to respond, but now he has to respond by October 19 in all circumstances.
Serious allegations against Noel Tata
The controversy stems from allegations made by Venu Srinivasan and Vijay Singh. Both are Vice Chairman and Trustee of SDTT. He has alleged major shortcomings in the functioning of the trust. He says that the trust’s interference in the business decisions of Tata Sons has gone too far. Tata Sons is actually the holding company of the entire Tata Group. Srinivasan has also questioned the appointment of Noel Tata as a lifetime trustee. Due to this position, Noel Tata is currently the Chairman of Tata Trust. Apart from this, objections have also been raised on the appointment of Neville Tata. Srinivasan clearly says that he has been completely kept out of many important decisions. Srinivasan, associated with the TVS Group, is also a nominee director on the board of Tata Sons.
Direct intervention in business decisions
The complaint emphasized that a charitable trust should stay away from commercial affairs. Srinivasan detailed to the Maharashtra Charity Commissioner that the Tata Trusts are now directly involved in the business of Tata Sons. He specifically referred to the September 17 statement which asked to explore options for the listing of Tata Sons. Along with this, questions have also been raised on the proposal to provide liquidity to Shapoorji Pallonji (SP) Group. SP Group owns over 18 per cent stake in Tata Sons, which is currently unlisted. Srinivasan argues that such direct business intervention could jeopardize the trust’s tax-exempt status. He believes that the power of trust is getting limited in the hands of few people.
Major decisions are made without consultation
The controversy deepened when on September 28 the trust sent an important letter to the board of Tata Sons. The letter proposed to merge Tata Electronics System Solutions Pvt Ltd and Tata Consulting Engineers into Tata Sons. The letter was sent by SDTT and Sir Ratan Tata Trust (SRTT). Together, these two trusts hold a major stake of 51.54 per cent in Tata Sons. But on September 30, Srinivasan and Vijay Singh wrote to the SDTT trustees expressing deep surprise. He said that he got the information of this big decision from outside. There was no meeting or discussion among the trustees before sending this proposal.
84 caveat file before the Commissioner
Legal maneuvers have also started in this whole matter. Besides SDTT, seven other Tata trusts have filed 84 caveats with the Maharashtra Charity Commissioner. Their objective is to ensure that their views are also heard before passing any order related to Tata Trust. The names of Noel Tata and Neville Tata are specifically included in these documents. Experts are saying that the move has been taken as a preventive measure in view of the growing controversy within the SDTT. Earlier in May too, the Charity Commissioner had imposed some restrictions on the functioning of SRTT, due to which the trust cannot hold its meetings now. The seven trusts that have filed caveats include JRD Tata Trust, Tata Social Welfare Trust, RD Tata Trust. Now all eyes are on October 19 to see what Noel Tata answers.
