Tata Trusts weighs legal moves to get SRTT back into decision-making fray

Tata Trusts is considering urgent legal action that will allow the Sir Ratan Tata Trust (SRTT) to participate in key decisions at Tata Sons, of which Tata Trusts is the controlling stakeholder. Curbs imposed on SRTT by the Maharashtra Charity Commissioner could complicate the process to find a successor to exiting Tata Sons chairman N Chandrasekaran. SRTT and Sir Dorabji Tata Trust (SDTT), the two principal trusts, must jointly nominate a representative for the annual general meeting (AGM) at Tata Sons next Tuesday. They must also nominate three members to a search committee that would select Chandrasekaran’s successor.

At its meeting on Thursday, Tata Trusts said that since SRTT cannot participate in the meeting due to the restraining order from the Charity Commissioner, no joint representative can be elected for the AGM, people aware of the details said. The meeting was attended by SDTT and other smaller trusts, as SRTT is barred from participating in important decisions by the charity commissioner.

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The meeting, held early Thursday, was wrapped up swiftly as trustees considered their next steps. Noel Tata, chairman of Tata Trusts, and trust members Venu Srinivasan, Darius Khambata and Vijay Singh participated in the meeting, according to those aware of the details.

Tata Sons must now review the matter and wait until Tuesday next week for the Trusts to update them on the quorum.

“The trustees have resolved to initiate, at the earliest, the process of setting up a selection committee” Tata Trusts said in a brief official statement after the meeting Thursday.

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Wait Continues

As a result, the Trusts said no joint representative can be elected for the AGM, people aware of the details said. Trusts chairman Noel Tata and members Venu Srinivasan, Darius Khambata and Vijay Singh participated, they said. Tata Sons must now review the matter and wait until Tuesday next week for the Trusts to update them on the quorum. “The trustees have resolved to initiate, at the earliest, the process of setting up a selection committee, in accordance with the Articles of Association of Tata Sons, to recommend a candidate for appointment as the new chairman of the board,” Tata Trusts said in a statement.
It said SDTT respects Chandrasekaran’s decision to not seek reappointment, and places on record its deep appreciation for his contribution and stewardship of Tata Sons and the group over the past decade, particularly during a period of significant change, growth and transformation.

The Tata Trusts board was scheduled to consider and approve accounts and other matters ahead of the flagship’s AGM, where the chairman’s tenure was expected to be a key issue. However, a day earlier, Chandrasekaran said he would not renew his term after it ends in February next year.

Much now depends on the Tata Sons AGM. If Tata Trusts gets the required quorum and votes against Chandrasekaran’s directorship, his tenure could end immediately. However, people aware of the developments told ET that the Tata Sons AGM may have to be deferred if the Trusts does not get the requisite quorum by then. Tata Trusts may, therefore, seek an urgent hearing before the charity commissioner, or approach the Bombay High Court, to ensure the succession process can proceed, said the people. The Trusts hopes to get relief from the commissioner, rather than having to move court.