Charity commissioner seeks reply from Noel Tata on share transfer

Mumbai: The Maharashtra charity commissioner's office has sought a detailed explanation from Noel Tata, chairman of Tata Trusts and trustee of the Navajbai Ratan Tata Trust (NRTT), on allegations related to the 1989 transfer of 833 Tata Sons shares from the trust to the late Naval H Tata.

The regulator will decide whether to order an independent inquiry into the matter after examining the response, it has stated. In a letter addressed to Noel Tata that was reviewed by ET, the charity commissioner's office said it had received a communication from Vijay Singh, trustee of NRTT and vice chairman of Tata Trusts, referring to a legal notice alleging that the January 18, 1989, transfer amounted to an unlawful alienation of assets belonging to a public charitable trust into private hands.

This is one of several issues that have cropped up in the past few months regarding questions of governance at India's largest conglomerate, which is also seeking to arrive at a decision on future leadership besides the status of holding company Tata Sons and whether regulations require it to be listed. Tata Trusts controls about 66% of Tata Sons.


The regulator noted that Singh's letter stated that while Tata Trusts had publicly denied the allegations, the denial authorised by a direct beneficiary of the share transfer is likely to give rise to a possible conflict of interest. The charity commissioner has directed Noel Tata to submit documents and clarify five aspects of the transaction raised by Singh's letter. These include the necessity for the transfer, the documentation supporting it, whether the trust received consideration based on an independent valuation, whether the shares ultimately benefited members of Naval Tata's family, and whether the transfer complied with the law in force at the time.

The regulator said the response and supporting documents would be crucial in determining whether an independent inquiry under the Maharashtra Public Trusts Act should be initiated. "In order to arrive at a decision whether an inquiry as requested is warranted, your response to the allegations is deemed necessary in keeping with the principles of natural justice," according to the communique.

"You are, therefore, called upon to submit your reply together with supporting documents, if any, in respect of the issues within a period of two weeks."

Noel Tata did not comment.

The development comes days after the state charity commissioner restrained the Sir Ratan Tata Trust (SRTT) from holding meetings or taking decisions pending an inquiry into alleged violations relating to the composition of its board of trustees and compliance with provisions of the Maharashtra Public Trusts Act.

Separately, ahead of a key meeting of the trustees of the Sir Dorabji Tata Trust, a fresh complaint was filed before the charity commissioner seeking an investigation into the 1989 transfer and urging the regulator to safeguard the interests of the public charitable trusts.

The June 4 complaint filed by Suresh Tulsiram Patilkhede through advocate Katyayani Agrawal alleges that the transfer was executed on January 18, 1989, a week after Naval Tata resigned as a trustee of NRTT.

It claims the transaction lacked legal necessity, was unsupported by a valid instrument of transfer and was carried out without consideration, making it unlawful under principles governing public charitable trusts.

The complaint also raises concerns over an alleged conflict of interest involving Noel Tata, contending that, as one of Naval Tata's successors-in-interest, he should not participate in deliberations concerning the transaction.

Tata Trusts had then rejected the allegations, calling them "baseless, unsubstantiated and mala fide." The Trusts maintained that the share transfer was lawful and fully compliant with the regulations applicable at the time.

"It was cleared at the appropriate levels, including by the late Mr Nani A. Palkhivala, one of the country's most distinguished lawyers, and approved by the then board of Tata Sons," Tata Trusts had stated in a DATE? media release.

"The transfer of shares was effected on a valid transfer form duly stamped by the Registrar of Companies."