Srinath, Tata Teleservices MD, emerges frontrunner for Tata Trusts CEO post

At a time when Tata Trusts is caught in a legal tangle over the cancellation of registration of six trusts, it’s set to get a chief executive officer (CEO). After a search process stretching over more than eight months, an old-timer from the group, N Srinath, managing director, Tata Teleservices, has emerged a frontrunner for the CEO’s post, according to sources in the know. 

Tata Trusts does not have any comment to make, a spokesperson told Business Standard on the matter. 

In February, R Venkataramanan (popularly known as Venkat) had stepped down as managing trustee of Tata Trusts, which owns 66 per cent in the salt-to-software group’s holding company Tata Sons. The new CEO, likely to be appointed soon, would possibly have similar powers as Venkat, but he won’t be designated managing trustee. 

A search committee, headed by the group’s chairman emeritus Ratan Tata, has over the last many months interviewed several internal employees as well as professionals from elsewhere to select a CEO. A final call on the selection of the CEO is expected to be taken by the committee before the year ends. 

Venkat’s resignation followed the Income-Tax Department’s scrutiny of his annual salary of Rs 2.66 crore, and the subsequent withdrawal of tax exemption given to Sir Dorabji Tata Trust, which is the largest among the clutch of trusts under Tata Trusts.

After Venkat’s resignation, operations of Tata Trusts have been managed by Chairman Ratan Tata along with a core group of officials. Among other recent changes in the organisation, Noel Tata, Ratan Tata’s half-brother, was appointed a trustee of the Sir Ratan Tata Trust, which is the second biggest trust in the Tata Trusts fold.

Tata Trusts, which played a critical role when Cyrus Mistry was removed as Tata Sons chairman in 2016, is again at the centre of a controversy. On October 31, the I-T Department cancelled the registration of six trusts (not the bigger ones) operating under Tata Trusts, citing violation of norms applicable to charitable institutions — a move that could result in a tax liability of about Rs 12,000 crore. 

The Tatas are challenging the date of the order, which makes the group liable to pay a much higher amount of tax under the new tax provision introduced in June 2016 concerning charitable trusts. The Trusts is of the view that the cancellation should apply retrospectively as it had offered to surrender the registration in 2015, about one year before the new tax provision became effective.
 

Tata Trusts was established in 1919, but the activities took off in a big way when Sir Dorabji Tata set up a trust in 1932.

Over the years, the significance of the Trusts has grown in terms of its commercial interest in the Tata Group and the power it holds, even as charity remains its core area, according to an official associated with it.