Tata family has no special right, a non-Tata may one day head the Trusts, says Ratan Tata

“I happen to be the current chairman of these trusts. It could be somebody else, not necessarily with the surname ‘Tata’, in the future. An individual’s life is finite, whereas these organisations will continue,” he said.

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Members of the Tata family have no “vested right” to that position or even to the chairmanship of Tata Sons, he said.
MUMBAI: The future chairman of Tata Trusts could be a non-Tata, incumbent head of the trusts Ratan Tata has said in a recent submission to the Supreme Court.

“I happen to be the current chairman of these trusts. It could be somebody else, not necessarily with the surname ‘Tata’, in the future. An individual’s life is finite, whereas these organisations will continue,” he said.

Members of the Tata family have no “vested right” to that position or even to the chairmanship of Tata Sons, he said in response to a plea filed by Cyrus Investments, a company controlled by the Mistry family.


The submissions come at a time when Ratan Tata is understood to be evaluating plans to institutionalise the management of Tata Trusts with an eye on the future, said top officials close to the developments.


ETD-1-21072020
Tata may Form Panel
“He (Tata) could seek to form a committee of high-ranking individuals from various fields, especially (with a background) in philanthropy and humanities,” said an official.
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Ratan Tata was the only chairman of both Tata sons and Tata Trusts to 'last chairman to occupy both the roles. Ratan Tata did not comment.

“The current chairman of Tata Sons is also not a ‘Tata’,” the patriarch said in his plea, countering the Mistry group’s claim that Tata Sons, the holding company, was a ‘quasi-partnership’ between the Tata and Mistry families.

Cyrus Investments, which owns Tata Sons shares, has sought the Supreme Court’s intervention to obtain ‘proportionate representation’ on the board of the holding company.

Ratan Tata’s submission goes on to say: “That so far as the members of the Tata family (descendants/relatives of founders) are concerned, no special right or role has ever been stipulated or given to them in the company (Tata Sons), or its management, apart from the rights that they would have under law as a shareholder in the company.”
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“Their shareholding itself shows that the structure of the Tata Group is delinked from the family,” Tata said, referring to the fact he and his relatives own less than 3% in Tata Sons.

‘BY CHOICE, NOT BY ACCIDENT’
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“This is by choice, and not by accident,” Tata said. “As early as 1919 and 1932, the founding members consciously endowed their wealth and shareholding in Tata Sons to charitable trusts with a vision to create an enduring legacy and institution which would become — and that has become — a benchmark for business excellence.”

The response filed by Ratan Tata said that other group companies, which cumulatively hold close to 13% stake in Tata Sons, also do not have any special rights. Therefore, it is not the case of the appellant (Mistry group) being singled out with regard to denial of any rights.

Ashish K Singh, managing partner of law firm Capstone Legal, said that as per the Indian Trusts Act, trusts have their own decision-making mechanism that includes a chairman, vice-chairman and trustees.

“Any decision is required to be taken with the concurrence of the trustees. As shares are the property of the trust, any decision with respect to voting rights will have to be taken as per the governing documents of the trust, including the deed,” Singh said. “Any lapse in the working of a trust cannot be decided in a special appeal petition in the Supreme Court against an order of the National Company Law Tribunal. Separate proceedings have to be initiated in court using civil jurisdiction,” he said.

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