Seven shareholder trusts of Tata Sons have filed caveats with the Charity Commissioner of Maharashtra in connection with a complaint filed by trustee Venu Srinivasan, seeking to ensure that no order is passed without hearing their side, people aware of the matter said.
Two sets of caveats have been filed, one each in the names of Noel Tata and Neville Tata. Noel Tata is on the boards of all seven trusts, while Neville Tata is a trustee of four.
The seven are Sir Dorabji Tata Trust (SDTT), Sir Ratan Tata Trust (SRTT), JRD Tata Trust, Tata Education Trust, Tata Social Welfare Trust, RD Tata Trust and Sarvajanik Seva Trust. Neville Tata is a trustee of all except SRTT, Tata Education Trust and Sarvajanik Seva Trust.
The move follows a complaint filed by Srinivasan on September 29 raising concerns over the governance and administration of SDTT.
Another SDTT trustee – former defence secretary Vijay Singh – is believed to have written to the charity authority as well. People with knowledge of the matter said that his letter to the charity commissioner is more or less in line with the complaints raised by Srinivasan.
Srinivasan has alleged irregularities in the appointment and continuation of trustees at SDTT, including questions over Noel Tata’s appointment as a perpetual trustee and the circumstances surrounding Neville Tata’s appointment. He has sought an inquiry into the composition and governance of the trust.
The complaint has also raised concerns about the potential impact of the trusts’ involvement in Tata Sons’ commercial affairs on their tax-exempt status. Srinivasan has cited provisions governing commercial activities by registered non-profit organisations and flagged potential tax consequences.
A third issue raised in the complaint concerns the independence of nominee directors. Srinivasan has alleged that an SDTT circular resolution seeking to restrict his participation and voting on matters related to the proposed listing of Tata Sons was an attempt to prevent him from exercising independent judgement as a nominee director.
Srinivasan has sought an immediate inquiry into SDTT’s administration and governance, including the appointment and status of its trustees, as well as consequential action based on the findings, including the suspension or removal of trustees.
He has also sought directions restricting chairman Noel Tata’s participation in trust decisions concerning Tata Sons and his role as a nominee or representative of the trusts, as well as preventing him from voting on certain Tata Sons board matters. Pending the inquiry, Srinivasan has sought status quo in the composition of SDTT’s board and a freeze on appointments, reappointments, removals or other changes to its trustee composition.
The filing of the caveats assumes significance given the experience of SRTT, which has faced complaints before the charity commissioner and whose board has been unable to meet while an investigation remains pending.
Earlier this year, complaints concerning SRTT were filed by Gurugram-based lawyer Katyayani Agrawal, former trustee Mehli Mistry and Srinivasan. Thane resident Sunil Tulsiram Patilkhede also filed a writ petition in the Bombay High Court containing similar allegations, against which SRTT had filed a caveat. The High Court subsequently allowed the petition to be withdrawn. SRTT, however, continues to be under investigation by the charity commissioner’s office.
In an order dated May 15, Maharashtra Charity Commissioner Amogh S Kaloti informed the trust that allegations made by Agrawal, and subsequently Srinivasan, were under investigation and directed SRTT not to convene board meetings until the process was completed.
Tata Trusts challenged the manner in which the direction was issued, arguing that it had been passed ex parte without giving SRTT an opportunity to be heard. Tata Trusts chairman Noel Tata and other trustees have since written to the charity authorities seeking permission for the SRTT board to resume meetings.
The inability of SRTT trustees to meet has created an administrative backlog at the trust and affected proceedings at Tata Sons. Most notably, Tata Sons’ annual general meeting, scheduled for August 18, had to be adjourned. With SRTT unable to convene, SDTT and SRTT could not nominate a joint representative, resulting in the meeting failing to meet the required quorum. It was the first time that a Tata Sons AGM had been adjourned.
Against this backdrop, any decision by the charity commissioner to order a similar investigation into SDTT could have wider implications for governance across the Tata group.
Tata Trusts collectively owns 66% of Tata Sons. SDTT and SRTT together hold 51.54%, with the other five trusts holding the balance of the Trusts’ stake.
Separately, Mistry filed a complaint in June against SDTT trustees, including Noel Tata, Srinivasan and Vijay Singh. That matter is scheduled to be heard by the charity commissioner on October 15.