Noel TataImage Credit source: PTI
The Maharashtra Charity Commissioner’s office has sought a detailed explanation from Noel Tata, chairman of Tata Trusts and trustee of the Nawabjabai Ratan Tata Trust (NRTT), on allegations related to the transfer of 833 shares of Tata Sons from the trust to late Naval H Tata in 1989. The regulator has said that after examining the reply, it will decide whether to order an independent inquiry into the matter or not.
In a letter sent to Noel Tata, the Charity Commissioner’s office said it has received a communication from Vijay Singh, trustee of NRTT and vice-chairman of Tata Trusts, ET reported. It refers to a legal notice alleging that the transfer made on January 18, 1989, amounted to an illegal transfer of the assets of a public charitable trust into private hands.
This is one of the many issues that have come to the fore in the last few months regarding governance questions in India’s largest conglomerate. The group is also trying to decide on the future leadership as well as the status of the holding company Tata Sons and whether it needs to be listed under the rules. Tata Trusts controls approximately 66% of Tata Sons.
These questions will have to be answered
The regulator said Singh’s letter states that although Tata Trusts has publicly denied the allegations, this denial by a person directly benefiting from the share transfer could create a situation of conflict of interest. The Charity Commissioner has directed Noel Tata to submit documents and provide clarification on five aspects of the transaction raised in Singh’s letter. These include issues such as the necessity of the transfer, the documents supporting it, whether the trust received any consideration based on an independent valuation, whether the shares ultimately benefited Naval Tata’s family members, and whether the transfer was in accordance with the law in force at that time.
Supporting documents will have to be submitted
The regulator said the responses and supporting documents would be important in deciding whether an independent investigation should be initiated under the Maharashtra Public Trusts Act. According to the communication, “Your response to the allegations is considered necessary, keeping in mind the principles of natural justice, to determine whether an investigation as requested is necessary. Therefore, you are asked to submit your response to these issues and supporting documents, if any, within two weeks. There has been no comment from Noel Tata.
Ban on taking decisions on SRTT
This development has happened after the state’s Charity Commissioner has stopped Sir Ratan Tata Trust (SRTT) from holding meetings or taking decisions. This ban has been imposed till the completion of the investigation into the alleged violations related to the formation of the Trustee Board and adherence to the rules of Maharashtra Public Trusts Act. Additionally, ahead of an important meeting of the trustees of Sir Dorabji Tata Trust, a fresh complaint was lodged with the Charity Commissioner. It demanded an investigation into the transfer that took place in 1989 and urged the regulator to protect the interests of the public charitable trust. On June 4, Suresh Tulsiram Patilkhede lodged this complaint through lawyer Katyayani Aggarwal. It alleges that the transfer was made on January 18, 1989, a week after Naval Tata resigned from the post of trustee of NRTT.
Claim made in complaint
The complaint claims that there was no legal requirement for this transaction, there was no valid transfer document for it and it was done without any consideration. For this reason, it is illegal under the principles governing public charitable trusts. The issue of conflict of interest related to Noel Tata has also been raised in the complaint. It said that being one of Naval Tata’s heirs, he should not be involved in the discussions related to this transaction.
Tata Trusts had then rejected these allegations, calling them “baseless, without evidence and malicious”. The trusts said that the transfer of shares was legal and in full accordance with the rules in force at that time. Tata Trusts had said in a media release that it was approved at appropriate levels, including by one of the country’s most eminent lawyers, the late Shri Nani A. Palkhiwala’s approval was also included, and it was also approved by the then board of Tata Sons. The transfer of shares was done through a valid transfer form which was stamped by the Registrar of Companies.
