Tata Trusts Vice Chairman Seeks Inquiry into 1989 Share Transfer

Mumbai: The controversy over a 1989 transfer of Tata Sons shares has intensified, with Tata Trusts vice chairman Vijay Singh writing to the Maharashtra charity commissioner seeking an independent inquiry.

Such an exercise "would go a long way in restoring public confidence in the administration of the Tata Trusts, and in maintaining their credibility and high standing," he told the commissioner in his June 10 letter regarding the transfer of shares from the Navajbai Ratan Tata Trust to late industrialist Naval Tata.

This follows a legal notice received by Singh alleging that the transaction amounted to an illegal alienation of public charitable assets being diverted into private hands.

According to Singh's letter, reviewed by ET, the notice questioned the necessity of the transfer, the existence of supporting documentation, and whether the trust received adequate consideration based on an independent valuation of the shares.

'Conflict-of-Interest Situation'

The letter comes days after a fresh complaint was lodged with the charity commissioner by petitioner Suresh Tulsiram Patilkhede, on whose complaint of irregularities in Sir Ratan Tata Trust, the charity commissioner had previously acted.

The complaint sought an inquiry into the transaction and urged the regulator to safeguard the interests of the public charitable trusts. It raised concerns over an alleged conflict of interest involving Tata Trusts chairman Noel Tata. As one of Naval Tata's successors-in-interest, he should not participate in any deliberations concerning the matter, it said.

Noel Tata didn't respond to queries. The charity commissioner's office was not immediately reachable for comment.

"As a trustee of the Sir Ratan Tata Trust as well as the Navajbai Ratan Tata Trust, I feel it is my duty to request an independent enquiry into both the legality and propriety of the transfer of these shares, so that the factual position is conclusively established," Singh wrote.

While the Tata Trusts have rejected the allegations in their response to media reports on the complaint, Singh said the rebuttal did not provide detailed explanations regarding the transaction. He referred to the Trusts' reliance on the approval of eminent jurist Nani Palkhivala, stating that it remains unclear whether a formal legal opinion was on record or whether the latter's approval was given in his capacity as a trustee.

Singh said the allegations also raise concerns that the shares ultimately benefited members of Naval Tata's family, some of whom continue to occupy influential positions within the Tata Trusts. Singh clarified that he was not casting aspersions on any individual but argued that a denial authorised under such circumstances could give rise to perceptions of conflict. Noel Tata is the son of Naval Tata.

"Since Mr Noel Tata, a direct beneficiary of the share transfer, is presently chairman of the Tata Trusts, it could be inferred that a denial authorised by him does create a conflict-of-interest situation, without casting any aspersions on anyone," Singh's letter stated. "In view of the above, I respectfully request your good office to initiate an independent enquiry under the provisions of the Maharashtra Public Trusts Act, 1950 into the circumstances of the said transfer and their compliance with the provisions of law then in force."

PAST COMPLAINT

A June 4 complaint had been lodged with the Maharashtra charity commissioner alleging irregularities in the transfer of 833 Tata Sons shares from the Navajbai Ratan Tata Trust to the late Naval H Tata nearly four decades ago.

Suresh Tulsiram Patilkhede, represented by advocate Katyayani Agrawal, alleged that the share transfer took place on January 18, 1989, a week after Naval Tata resigned as a trustee of the trust. According to the representation, the transfer lacked legal necessity, was not supported by a valid instrument of transfer and was carried out without consideration, rendering it unlawful under principles governing public trusts.

The Tata Trusts had stated that any suggestion of impropriety on the part of the Sir Dorabji Tata Trust, Navajbai Ratan Tata Trust or any of the parties involved in the transaction was "categorically denied." It alleged that the latest accusations formed part of a "wilful, malicious and orchestrated campaign" aimed at discrediting an institution that has been engaged in philanthropic activities in India for over 130 years.

The Tata Trusts added that they would pursue appropriate legal remedies to protect their reputation and goodwill.