The executors of the late Ratan Tata’s will are expected to meet later this month to discuss a recent order by the Charity Commissioner of Maharashtra which implies that shares of Tata Sons can only be transferred to family members, and not third parties, persons in the know said.
The charity authority last week passed an order that cleared the transfer of 833 shares from the Navajbai Ratan Tata Trust (NRTT) to Naval Tata back in 1989.
The order noted that the shares were transferred subject to a condition that they would not be sold to any third party and would remain within the family of the recipient. The Commissioner held that the transfer complied with the law in force at the time.
This results in some degree of ambiguity in the execution of Ratan Tata’s will. Tata has bequeathed his shares in Tata Sons – 3,368 shares amounting to roughly 0.83% stake in the Tata Group holding company – to two charity units which sit outside of the Tata Trusts.
He is believed to have left 70% of his holding to Ratan Tata Endowment Fund (RTEF) and the remaining 30% to Ratan Tata Endowment Trust (RTET).
“The question that now arises is whether the will or the order takes precedence. Typically, in such a scenario, parties would move a higher judicial authority, in this case most likely the Bombay High Court, seeking an interpretation,” a legal expert said.
Executors of Ratan Tata’s will include senior advocate and trustee Darius Khambata, former trustee Mehli Mistry, and his half-sister – Shireen and Deanna Jejeebhoy (daughters of his mother from her second marriage).
Mistry and Khambata did not respond to queries sent by FE on the matter, while Shireen and Deanna could not be reached until press time.
Legal experts also pointed out that there is no precedent where shares held by the family members have been transferred to third parties. Last year, when Simone Tata, mother of Tata Trusts chairman Noel Tata passed away, her shares were distributed amongst Noel, and his children Neville, Maya, and Leah Tata.