Fresh trouble in Tata Trusts Tata Sons controversy:Trustee raises concern on Noel Tata’s chairmanship his son, Neville Tata’s appointment in trust

Disputes over leadership and governance at the Tata Group have intensified. Venu Srinivasan, the joint nominee director of Tata Trusts, questioned how Noel Tata could remain chairman while also being involved in the affairs of the group’s principal operating holding company, ‘Tata Sons’. According to The Economic Times, Srinivasan wrote to the Maharashtra Charity Commissioner objecting to the decision to retain Noel Tata as a trustee and chairman permanently. He also questioned the decision to appoint Noel’s son, Neville Tata, as a trustee. According to Srinivasan, Tata Trusts has now deviated from its core work of social service and is interfering in companies’ business decisions. The trustees themselves are involved in deciding, negotiating and finalising major business deals, which is against the rules governing charitable trusts. Two reasons for the dispute between Tata and Srinivasan 1. The two have differing views on whether Tata Sons should be listed on the stock market. Srinivasan wants the company to be listed, while Noel Tata is strongly opposed to it. 2. They also differ over N Chandrasekaran’s reappointment as chairman of Tata Sons and his way of working. Attempt to prevent Srinivasan from voting The dispute escalated to the point that the Sir Dorabji Tata Trust attempted to prevent Venu Srinivasan from attending Tata Sons board meetings and voting. The trust argued that supporting the listing was contrary to its position, and therefore Srinivasan should not have the right to vote on behalf of the trust. Tata said: We have a solution to avoid listing Noel Tata is looking for a way to defer Tata Sons’ listing within the rules of the Reserve Bank of India. In a recent interview, Noel Tata said, “We have sent Tata Sons a potential solution which, in our view, falls within the scope of the RBI’s existing guidelines. We want Tata Sons to consider it and, if necessary, discuss it with the RBI.” Noel Tata expressed hope that the RBI and Tata Trusts could agree on a solution that would defer Tata Sons’ listing on the stock market. He said, “This is not rocket science, but a path that takes us back to our roots.” Merger to save Tata Sons from listing Two days ago, reports said that Noel Tata had devised a new plan to prevent Tata Sons from being listed on the stock market. Under the plan, two separate Tata companies – Tata Electronics and Tata Consulting Engineers – would be merged with Tata Sons. After the merger, Tata Sons would itself become a company that makes and sells services or goods, rather than a financial investment company. This would take Tata Sons outside the scope of the RBI’s stringent regulations. It would allow the Tata Group to retain full control of its holding company. For 80 of its 100 years, Tata Sons has run its own business in this way. According to F N Subedar, adviser to the Tata Trusts and former company secretary of Tata Sons, this is not a new experiment but a return to Tata Sons’ old business model.