Tension rises at Tata Trusts, another trustee's renewal faces opposition
What's the story
Tata Trusts Chairman Noel Tata, Vice Chairman Venu Srinivasan, and trustee Vijay Singh are unlikely to approve the reappointment of trustee Mehli Mistry. His term is set to end on October 28. The decision is likely to be announced later today, as per media reports. Mistry has been a trustee of Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT) since 2022.
Potential disputes
Disagreement may lead to legal battles
The disagreement over Mistry's reappointment could lead to legal battles. He has been seen as opposed to Noel and other nominee directors on the Tata Sons board. The two trusts hold a 51% stake in Tata Sons, the holding company of the Tata Group. A resolution for his term renewal was moved by Siddharth Sharma, CEO of Tata Trusts, last Friday.
Governance norms
Traditional unanimous appointment process broken
Traditionally, trustee appointments at Tata Trusts have been done unanimously. However, this was broken on September 11 when former defense secretary Vijay Singh was removed as a nominee director on the board of Tata Sons by majority decision. This has raised questions about whether reappointment of a trustee can be done by majority vote or requires unanimous decision in case of differences.
Approval dispute
Mistry's conditional approval for Srinivasan's reappointment
Last week, Mistry gave a conditional approval for Srinivasan's reappointment as trustee and vice chairman of SDTT. He demanded reciprocity in the renewal of his own term. This has led to speculation that Mistry might withdraw his approval for Srinivasan and even legally contest the decision by Noel, Srinivasan, and Singh not to renew his term.