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Tata Trusts row deepens as vice-chairmen allege concealment, forced resignation

Mumbai: The CEO of Tata Trusts, which is the majority owner of India's largest business conglomerate, asked vice-chairmen Venu Srinivasan and Vijay Singh to resign last week, while concealing material information, the two prominent trustees have alleged, precipitating yet another round in what has been a series of infighting bouts at the highprofile public charitable trusts. Trusts CEO Siddharth Sharma asked the two vice-chairmen to step down from the Bai Hirabai JN Tata Navsari Charitable Institution, of which they are trustees, late last week. While Srinivasan, chairman of TVS Group, has stepped down, Singh, a former defence secretary, has not. Both vice-chairmen told ET that a key legal opinion -- from former chief justice of India MH Kania, on the eligibility criteria as a trustee -- was "concealed" by Tata Trusts. Also Read: Religion is no disqualification for trustees, as per Tata Trusts note They further alleged that Srinivasan's resignation was obtained by concealing facts and amounted to an act of misrepresentation. "I was not fully informed of the situation. Justice Kania's opinion was not provided along with the request to resign," Srinivasan told ET. Inquiry Sought The alleged move by the Tata Trusts CEO came in the wake of a petition by trustee Mehli Mistry, who had sought an inquiry by the Charity Commissioner of Maharashtra, alleging that neither Srinivasan nor Singh meets the eligibility criteria to hold the offices they did. Mistry contended that both individuals are neither members of the Parsi Zoroastrian faith nor permanent residents of Mumbai -- conditions he claims are mandatory under the trust's provisions. Also Read: Tata Trusts row deepens as Venu Srinivasan exits Bai Hirabai Trust "The haste with which the CEO acted after Mistry's allegations, and the unusual step of calling two trustees and asking them to resign -- concealing the legal opinion from former CJI MH Kania -- indicates seriously flawed governance and an implicit bias against the two trustees," Singh said. "Sharma had reached out to both trustees, seeking their resignation in the wake of Mistry's move. I was also asked to tender my resignation by the CEO, but I sought time on the matter," Singh told ET. Sharma and Tata Trusts did not respond to a request for comment. Tata Trusts is an umbrella organisation of a cluster of charitable trusts endowed by members of the Tata family over more than a century. ET reported on Saturday that in an internal note to trustees, circulated after Srinivasan's resignation, Sharma said that of the remaining trustees of the Navsari trust, the only non-Zoroastrian is Singh. But, as per Kania's opinion, he is not barred from being a trustee, said the note. Tata Sons former chairman Ratan Tata had obtained legal opinion in the year 2000 from Kania on the matter, ahead of the induction of RK Krishna Kumar into the trust. As per the opinion, there was no bar on having non-Zoroastrians on the Bai Hirabai Trust. He stated that in view of Clause 4 of the Codicil (supplement to a will) of Sir Ratan Tata, Clauses 6 & 18 as contained in the Bai Hirabai Trust Deed were bad in law. In the opinion, a copy of which ET has seen, Kania recaps the circumstances under which the trusts were established and the history of the now controversial provision. Broadly, he held that the provisions of the Codicil to the Will of Sir Ratan Tata overrides the clauses in the trust deed established later. "Most of the bequests, other than personal bequests under the said Will and Codicil, are not restricted to any section or community but are of general benefit to all the communities. There is no provision in the said Will (of Sir Ratan Tata) that the trustees of the Trust created under the said Will will belong to any particular community, although it so happened that till the appointment of Mr Krishna Kumar as aforestated, they happened to belong to the Parsi community and followed the Zoroastrian faith," the opinion noted. "Under the said Codicil, it is clearly provided that all the trustees of the Tata Trust will be the trustees of the said Navsari Trust, although it will be open to them to take an additional trustee or trustees who will be Parsis of Navsari, if the trustees so think fit, for better and more efficient management of the properties of the said Navsari Trust. Such additional trustee or trustees will be only in respect of the Navsari Trust. A problem has been created because the trustees of the Will of Sir Ratan Jamsetji Tata, in the Trust Deed settling the Navsari property, incorporated a clause in the Trust Deed whereby it was required inter alia that all the trustees of the said Navsari Trust should be of the Zoroastrian faith, and if any trustee gave up their faith, would cease to be a trustee of the said Navsari Trust," he said. Kania added, "It was not open to the trustees of the said Tata Trust to cut down the effect of that provision in the Will by providing in the Deed of Settlement of the said Navsari Trust that the trustees of the Navsari Trust must be Zoroastrians. Clauses 6 and 18 of the Deed of Settlement of the said Navsari Trust which is dated 7th December, 1923, are bad in law insofar as they provide that the trustees of the said Navsari Trust must be Zoroastrians. The same would be the position regarding the provision in clause 18 of the said Deed of Settlement, that the trustees must be permanent residents of the area comprised in the then Bombay Presidency or Navsari." The codicil and trust deed from more than a century ago now comes into prominence as a struggle for control of Tata Trusts -- and thereby Tata Sons -- is underway among trustees, which has seen a series of twists and turns since the December 2024 death of long-time patriarch Ratan Tata. To be clear, there are thus far no questions about the eligibility of non-Zoroastrians to be trustees of the main trusts that own shares in Tata Sons, such as Sir Dorabji Tata Trust (27.98%) and Sir Ratan Tata Trust (23.56%). The legal opinion is not binding and trustees will be free to litigate. Ketan Mukhija, partner at Kochhar & Co, said that from a legal standpoint, an opinion rendered by a former chief justice such as MH Kania carries considerable persuasive value, but it does not have binding or precedential force in an ongoing dispute. "Adjudicatory authorities, including the Charity Commissioner and courts, are guided primarily by the trust deed and the applicable statutory framework -- in this case, the Maharashtra Public Trusts Act, 1950," said Mukhija.

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