Tata Sons boardroom feud spills into Tata Trusts

Mumbai, Sept 30 (PTI) The widening boardroom dispute at Tata Sons has opened a new front, with trustee and Tata Sons nominee director Venu Srinivasan seeking a regulatory inquiry into the governance of the Sir Dorabji Tata Trust, one of the charitable entities that collectively control about 66 per cent of the holding company.

In a letter to Maharashtra's Charity Commissioner, Srinivasan has questioned the appointment and continued status of Noel N. Tata as a perpetual trustee, the appointment of Noel Tata's son Neville Tata, and what he describes as attempts to constrain his independent role as a nominee director on the Tata Sons board.

The move could add another layer of complexity to an already bitter dispute over Tata Sons' leadership, a potential stock-market listing and the extent of Tata Trusts' authority over the company. The conflict has already split trustees and spilled into the Tata Sons boardroom, where Srinivasan and Noel Tata took opposing positions on key decisions earlier this month.

Srinivasan's complaint centres in part on Circular Resolution No. 107, which he says was issued by SDTT on September 16 to prevent him from participating in or voting on the proposed listing of Tata Sons.

He alleges that the move sought to "prevent me from exercising my independent judgement and vote" and amounted to an attempt to concentrate decision-making within a smaller group of trustees.

The following day, at a Tata Sons board meeting, Srinivasan backed the reappointment of Chairman N. Chandrasekaran for a third five-year term and supported moving ahead with the listing process, while Noel Tata opposed both positions.

The board proceeded with the resolutions, with the Chandrasekaran vote requiring a casting vote. Tata Trusts subsequently disputed the validity of the board decisions and has maintained that its nominees were required to agree on such matters.

The dispute is particularly consequential because Srinivasan occupies positions on both sides of the Tata Sons shareholder relationship: he is a trustee of the Tata Trusts and also their nominee on the Tata Sons board.

The latest complaint potentially brings the conduct of the trusts themselves under regulatory scrutiny at precisely the point when their internal divisions are having a direct bearing on decisions at the company they control.

Srinivasan in the letter also alleged that the trusts have become too directly involved in Tata Sons' commercial affairs. He cited Tata Trusts' September 17 statement that "all available options, and not listing alone, should be thoroughly explored and assessed on an immediate basis" after the Reserve Bank of India's communication on the listing issue.

Tata Trusts had earlier said it did not agree to a listing and wanted alternatives examined.

The letter further refers to a proposal put forward by Noel Tata concerning liquidity for the Shapoorji Pallonji Group, whose stake in Tata Sons has long been a significant issue in the company's ownership structure.

Srinivasan argued that the involvement of Tata Trusts and its operating team in such commercial matters raises questions about the charitable trusts' governance obligations.

He asked the Charity Commissioner to investigate the administration and composition of SDTT and, depending on the findings, take action including suspension or removal of trustees. He has also sought directions restricting Noel Tata's participation in certain SDTT decisions concerning Tata Sons and has asked that the composition of the SDTT board be frozen pending the inquiry.

"I write to bring to your attention serious concerns regarding the composition, administration and governance of Sir Dorabji Tata Trust (SDTT), including matters arising from the amendments to the Maharashtra Public Trusts Act, 1950 (MPT Act), which came into effect on September 1, 2025, as well as certain subsequent decisions and actions concerning the administration of SDTT," he wrote.

SDTT, he said, was constituted under a Trust Deed dated March 11, 1932, by the Late Sir Dorabji Tata for charitable purposes including education, health, relief in natural disasters, research, promotion of industry, science, charitable institutions and other similar objects of public benefit.

Its affairs and substantial assets are therefore required to be administered strictly in furtherance of its charitable objects and consistently with the standards imposed upon Trustees of a public trust.

The present composition of SDTT includes Noel N. Tata (first appointed in February 2022 and having a perpetual term), Srinivasan (whose term runs through November 12, 2028), Vijay Singh (till July 13, 2027), Darius Khambata (till November 9, 2026), Neville N. Tata (term till November 12, 2028) and Bhaskar Bhat (term till November 12, 2028).

"A matter of serious concern is the increasing involvement of SDTT and Tata Trusts in the commercial and strategic affairs of Tata Sons Private Limited. SDTT is a public charitable trust and its substantial shareholding in Tata Sons cannot be permitted to result in the Trust itself assuming the functions of a commercial enterprise or participating directly in the conduct of Tata Sons' business affairs," Srinivasan wrote.

Citing Tata Trusts' September 17 statements, he said, "The Tata Trusts themselves, acting through their Chairman (Noel Tata) and operating team, have assumed a direct role in identifying, negotiating and seeking implementation of substantial commercial transactions concerning Tata Sons. Such activities go materially against the charitable objects and obligations of the Trust."

"The tax consequences of such conduct are substantial," he said, adding the Income-tax Act, 2025 restricts the carrying on of commercial activities by registered non-profit organisations.

A contravention constitutes a "specified violation" may result in cancellation of the Trust's income-tax registration and consequent loss of the tax exemption attaching to such registration, he said.

"Where registration is cancelled, Section 352 (tax on accreted income) may additionally result in tax at the maximum marginal rate on the Trust's accreted income, computed broadly by reference to the fair market value of its assets less liabilities and statutory exclusions.".

Given the substantial value of SDTT's shareholding in Tata Sons, the potential consequences for the Trust and its charitable corpus could therefore be immense, he added.

"The Trustees are therefore exposing the Trust and its charitable corpus to potentially immense fiscal consequences by involving the Trust directly in commercial activities which may not be incidental to its charitable objects. Such conduct constitutes mismanagement of the affairs and property of SDTT and a breach of the duties owed by its Trustees," Srinivasan said.

On September 16, circular resolution SDTT moved seeking to restrain him in his capacity as a nominee director on the Board of Tata Sons from participating in or voting on the proposed listing of Tata Sons, Srinivasan said "this was an extraordinary attempt to prevent me from exercising my independent judgement and vote, and to neutralise my position as a Trustee because it differed from that of certain other Trustees."

"More fundamentally, it was an attempt to effect a power grab within SDTT and, through it, to dictate what Tata Sons should do instead of allowing its Board to objectively evaluate the available alternatives on their merits. Viewed alongside my earlier exclusion in November 2025, it forms part of a continuing effort to suppress differing views and concentrate decision-making power within a smaller group of Trustees," he said.

He sought an immediate inquiry into the administration and governance of SDTT, including the appointment and continued status of the existing perpetual Trustee (Noel Tata), and circumstances surrounding the appointment of Neville N. Tata (Noel Tata's son). He also sought an inquiry into his exclusion from the relevant decision-making process as well as the involvement of SDTT and its Trustees in the commercial and strategic affairs of Tata Sons.

He sought action appropriate directions be issued to Noel N. Tata to recuse himself from participating in, deliberating upon or voting at any meeting or circular resolution of SDTT concerning the appointment, nomination, authorisation or instruction of any nominee, representative or proxy to attend or vote at any general meeting of Tata Sons.