Mumbai

Thewidening boardroom dispute at Tata Sons has spilled into Tata Trusts, with trustee and Tata Sons nominee director Venu Srinivasan seeking a regulatory inquiry into the governance of the Sir Dorabji Tata Trust (SDTT), one of the charitable entities that collectively control about 66 per cent of Tata Sons.

In a letter to Maharashtra’s Charity Commissioner, Srinivasan has questioned the appointment and continued status of Noel N. Tata as a perpetual trustee, the appointment of Noel Tata’s son Neville Tata, and what he described as attempts to constrain his independent role as a nominee director on the Tata Sons board.

At the centre of the dispute is a September 16 SDTT circular resolution that Srinivasan said sought to prevent him from participating in or voting on the proposed listing of Tata Sons. He described it as an attempt to “prevent me from exercising my independent judgement and vote”.

The following day, at a Tata Sons board meeting, Srinivasan supported the reappointment of Chairman N Chandrasekaran for a third five-year term and backed moving ahead with the listing process. Noel Tata opposed both positions. The board passed the resolutions, with the Chandrasekaran vote requiring a casting vote. Tata Trusts later disputed the validity of the board decisions, maintaining that its nominees were required to agree on such matters.

Srinivasan has also questioned the Trusts’ involvement in Tata Sons’ commercial affairs. Referring to a September 17 Tata Trusts statement that all available options, and not listing alone, should be explored, he alleged that the Trusts and their operating team had assumed a direct role in commercial and strategic matters concerning Tata Sons. He argued that such involvement could conflict with the charitable objectives of SDTT and potentially expose it to tax consequences. He alleged that the Trust was being exposed to “potentially immense fiscal consequences” and described the conduct as mismanagement of its affairs and property.

Srinivasan has sought an immediate inquiry into SDTT’s administration and governance, including Noel Tata’s perpetual trusteeship, Neville Tata’s appointment, his own exclusion from decision-making and the Trusts’ involvement in Tata Sons’ commercial affairs.

He has also sought directions for Noel Tata to recuse himself from SDTT decisions relating to the appointment, nomination or instructions of Tata Sons nominees. SDTT was established in 1932 by Sir Dorabji Tata for charitable purposes including education, healthcare, disaster relief, research and promotion of industry and science.

Mumbai

TataTrusts Chairman Noel Tata has urged the Tata Sons board to review a restructuring proposal aimed at avoiding a stock market listing of the holding company.

Noel Tata said he remained hopeful that the Reserve Bank of India would reconsider its decision to classify Tata Sons as an upper-layer non-banking financial company (NBFC).

According to him, listing Tata Sons would fundamentally change the way the Tata group has operated for decades and could create a conflict between investor expectations for profits and the philanthropic objectives of Tata Trusts.

Tata Trusts, which owns 66 per cent of Tata Sons, has proposed merging Tata Electronics Systems Solutions and Tata Consulting Engineers with Tata Sons. The restructuring would give Tata Sons its own operations and revenue and could allow it to avoid classification as an NBFC or core investment company. Tata Sons was placed on the RBI’s upper-layer NBFC list in September 2022 and was given three years to list. The company subsequently cleared its debt and applied in 2024 to surrender its core investment company status and remain private. However, the RBI rejected the application earlier this month and asked Tata Sons to comply with applicable norms.

Noel Tata was the lone dissenting voice when the Tata Sons board voted earlier this month to prepare for a listing and give Chairman N Chandrasekaran a fresh five-year term. He also described the board’s decision to reappoint Chandrasekaran as chairman as illegal. Noel Tata said Tata Sons had historically supported group companies during difficult periods and questioned whether outside shareholders would back similar investments.

He also highlighted education, healthcare and jobs as key areas for Tata Trusts’ philanthropic work and said there was a need to bridge the gap between university education and industry requirements.