Tata Trusts Trustee Must be Reappointed After Term Conclusion for Lifetime Trusteeship: Top Sources Amid Internal Rift

Amid the ongoing Tata Trusts boardroom tussle, top sources have said that a trustee of Tata Trusts must be reappointed once his term concludes, to be eligible for lifetime trusteeship.

This comes at a time when there is an ongoing power struggle at Tata Trusts, after the death of Tata Group’s former chairperson Ratan Tata. At a time when some trustees’ tenures are up for renewal by the end of this month, lawyers are learnt to be studying the fineprint of clauses that are associated with lifetime trusteeship, Business Standard reported.

Shortly after the passing away of Ratan Tata, the Tata Trusts in a meeting had approved lifetime trusteeship. However, according to sources, the term of a trustee has to be renewed prior to getting a lifetime trustee status. Additionally, the renewal of term has to be through a consensus mechanism. Trustees at Dorabji Tata Trust, the key trust which along with Sir Ratan Tata Trust own a majority of share in Tata Sons, have had a three-year term.  

As of now, email queries sent to Tata Trusts have not received any response. 

As per legal sources, lifetime trusteeship would depend upon the Tata Trusts deed and that several trusts do have the provisions of lifetime trusteeship.

Currently led by Noel Tata, Tata Trusts is facing an internal rift. Four trustees including Mehli Mistry, Pramit Jhaveri, Darius Khambata, and Jehangir H Jehangir has voted to remove former defence secretary and vice-chairman of Tata Trusts, Vijay Singh, from the Tata Sons board in September, thereby further intensifying the divide at the Trusts. In addition to that, Mistry’s appointment to the Tata Sons board was blocked by some of the trustees.

Besides the power tussle, the proposed listing of Tata Sons is another area of dispute. The Trusts had recently advised Tata Sons chairman N Chandrasekaran to be engaged with the Reserve Bank of India (RBI) to prevent listing of the group’s holding company.  

The Centre has also stepped in to resolve this ongoing fight at the centre of a leading business in India. A meeting was held among Home Minister Amit Shah, Finance Minister Nirmala Sitharaman and the top representatives of Tata Sons and Tata Trusts last week.

Following the government intervention, the next Tata Trusts meeting turned out to be a muted affair with trustees focusing on allocations to the healthcare sector instead of contentious governance issues, a BS report stated.

Meanwhile, coinciding with all these developments, Shapoorji Pallonji (SP) Group, which holds 18.4 per cent stake in Tata Sons recently reiterated the importance of Tata Sons listing. That would be an opportunity for the SP Group to unlock value and pare down its high-cost debt.