The differences among the trustees of Tata Trusts had no impact on the reappointment of Venu Srinivasan on the board of Sir Dorabji Tata Trust (SDTT), which along with Sir Ratan Tata Trusts holds over 51% stake in Tata Sons. The decision was taken unanimously.
While the focus now shifts to the reappointment of Mehli Mistry, whose term ends on October 28, sources familiar with the developments said that is also expected to be a smooth affair. Both will become trustees for life in accordance with a resolution passed in a board meeting on October 17 last year.
While their reappointment should come as an immediate relief in the backdrop of simmering tension between the two groups in Tata Trusts, the real war — that of selection of new members on the Tata Sons board — is going to be a tricky affair.
That’s because the war started with the proposed renomination of Vijay Singh on the board of the Tata Group’s holding company. Singh, who continues as one of the members of Tata Trusts, had to quit Tata Sons board last month as his renomination was opposed by four trustees — Mistry, Darius Khambata, Pramit Jhaveri and Jehangir H Jehangir.
Though Srinivasan and Noel Tata supported him, it wasn’t enough for Singh as all Tata Trusts’ decisions need to be unanimous. In turn, the duo opposed Mistry’s candidature for Tata Sons board, exposing the deep rift among the trustees.
Sources familiar with the developments said there is no possibility of Noel reconsidering his decision to reject Mistry’s bid for a board seat at Tata Sons.
“Even Ratan Tata, who worked very closely with Mistry for a very long time, never proposed his entry to the Tata Sons board. Thus it’s highly unlikely that Noel would do otherwise,” sources said. The hard position taken by the two camps can potentially lead to a long stalemate over existing vacancies on the Tata Sons board. After the snub he has received, Mistry is unlikely to accept the names proposed by Noel Tata.
The names doing the rounds are that of Kotak Mahindra Bank Founder and Director Uday Kotak and AZB & Partners Co-Founder Bahram Vakil, who joined the board of Tata Investment Corp in March this year. The other name proposed is Tata Steel Managing Director TV Narendran.
In fact, Tata Sons board now has to fill four vacancies after Singh’s exit. The other three slots opened up after the exit of former Jaguar Land Rover CEO Ralf Speth, industrialist Ajay Piramal and Independent Director Leo Puri. The board now comprises Chairman N Chandrasekaran, non-executive directors Noel Tata, Venu Srinivasan, Group CFO Saurabh Agrawal and independent directors Harish Manwani and Anita Marangoly George.
These directors are key to every major decision of Tata Group companies under Articles of Association of Tata Sons. A 2021 Supreme Court judgment in Tata Sons vs Cyrus Investments case gives details of some of the powers nominee directors hold.
Under Article 104B(b) of the Articles, Sir Dorabji Tata Trust and Sir Ratan Tata Trust have a standing right to nominate one-third of the company’s directors, a right exercised whenever the board is formed or a vacancy arises. In addition, Article 121 lists several “reserved matters” such as changes in shareholding, alteration of the Articles, appointment or removal of the chairman, sale of major assets, or entry into new business areas, that require the affirmative consent of the Trusts’ nominee directors.
