Noel vs Srinivasan: What's happening at Tata Trusts?
What's the story
Noel Tata, the chairman of Tata Trusts, and his son Neville have filed multiple caveats with the Maharashtra charity commissioner. The move comes as a response to complaints made by Vice Chairman Venu Srinivasan over the management of these charitable trusts. Noel has filed 21 caveats while Neville has filed 15. The filings are meant to protect the Trusts from any unfavorable decisions at a time when their voting power in Tata Sons is crucial.
Trusts' defense
Caveats pertain to 7 shareholding trusts
The caveats filed by Noel and Neville are in response to a complaint filed on September 29. The complaint pertains to the management of Sir Dorabji Tata Trusts (SDTT), the largest shareholder of Tata Sons.
Noel's caveats specifically pertain to seven shareholding trusts under the Tata Trusts umbrella. This umbrella organization consists of 14 philanthropic entities, seven of which hold shares in Tata Sons.
Voting power
Trusts want to be heard before adverse order is passed
The decision to approach the charity commissioner indicates that the Trusts are keen on being heard before any adverse order is passed.
This is particularly important as they need to exercise their 65.9% voting power at Tata Sons' upcoming annual general meeting (AGM).
The AGM will see Tata Sons chairman N Chandrasekaran's reappointment as a director, which was opposed by Noel in a board meeting on September 17.
Trusts' strategy
Preventing 'paralysis' of largest shareholder
Another reason for filing the caveats is to prevent their largest shareholder from being "paralyzed," like Sir Ratan Tata Trust (SRTT) was.
On May 15, the charity commissioner had barred SRTT from holding meetings or making decisions.
This came after Srinivasan alleged that three permanent trustees of SRTT exceeded the state rule cap on permanent trustees at one-fourth of the total count.
Currently, SRTT has five trustees.
Rising tensions
Tensions between Tata Trusts and Tata Sons escalate
Srinivasan's complaint, the second after he raised concerns about SRTT in April, is escalating tensions between Tata Trusts and Tata Sons.
Some lawyers have even called it an "all-out war" for control of the Tata Group.
In his complaint to the charity commissioner, Srinivasan sought to maintain a status quo on the current board member count for SDTT and asked Noel to recuse himself from matters concerning appointment or authorization of representatives of SDTT at Tata Sons meetings.