Noel Tata says '89 share transfer in line with the law

Mumbai: Tata Trusts chairman Noel Tata has responded to the Maharashtra Charity Commissioner's office on allegations about the transfer of 833 Tata Sons shares from the Navajbai Ratan Tata Trust (NRTT) to the late Naval H Tata in 1989, saying the transaction fully complied with existing laws back then, people familiar with the matter told ET.

Noel Tata, who is understood to have said in his response last week that the transaction was 'undertaken for a consideration', also told the charity commissioner the transfer was cleared at the appropriate levels, including by the late Nani A Palkhivala, one of the country's most distinguished lawyers. It was also approved by the then board of Tata Sons, Noel Tata has reportedly written in his response to the charity commissioner, said the people cited above.

The transfer of shares was made on a valid form duly stamped by the registrar of companies (RoC), said the people aware of Noel Tata's response to the Charity Commissioner's office. The state regulator for trusts will examine Noel Tata's response and supporting documents before deciding whether to order an independent inquiry under the Maharashtra Public Trusts Act.

"There are a bunch of documents shared by various stakeholders on the matter. The charity commissioner could study those in totality to arrive at an informed view on whether an inquiry into the matter should be conducted," said an official privy to the developments.

Noel Tata did not comment.

The charity commissioner had sought Noel Tata's explanation last month after receiving 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.

Tata Sons AGM

Separately, Tata Trusts is exploring legal options for the Sir Ratan Tata Trust (SRTT) to participate in Tata Sons' August 18 annual general meeting (AGM) despite the charity commissioner's order restraining SRTT from holding meetings or taking decisions, sources said. Singh has stepped down as a trustee of SRTT, just days ahead of the expiry of his term. These developments come amid market speculation that the closely held Tata Sons, the holding company of India's most diversified conglomerate, would be required to list its stock on domestic exchanges after the central bank included its name in the latest list of non-banking finance companies-upper layer (NBFC-UL).

All other names on the central bank NBFC-UL list are publicly traded companies. A Tata Sons listing is seen as crucial for the debt-laden Shapporji Pallonji (Group), which owns a significant minority stake in Tata Sons, to deleverage its balance sheet.

According to the sources cited above, SRTT has not approached the Bombay High Court and is instead likely to seek permission from the Charity Commissioner's office to attend the Tata Sons AGM, arguing that participation is necessary in the interest of the trust.

"The charity commissioner will only examine whether attending the AGM is beneficial to the trust. Any permission would be limited to participation in the meeting and will not affect the ongoing inquiry," a person aware of the matter said.