 "Mehli Mistry")
In an unprecedented development, a trustee at Tata Trusts has been voted out. Three trustees — Tata Trusts Chairman Noel Tata, industrialist Venu Srinivasan, and former bureaucrat Vijay Singh — on Tuesday voted against the reappointment of Mehli Mistry, effectively blocking his continuation as a trustee, sources said.
As Tata Trusts is the largest shareholder, at 66 per cent, in Tata Sons — the parent company of the salt-to-semiconductor conglomerate — the escalated rift among the trustees is under the spotlight.
With the latest move, three of six trustees opposed the renomination of Mistry, whose three-year term ended on October 28. Mistry will have to step down from the boards of two core trusts — Sir Dorabji Tata Trust and Sir Ratan Tata Trust. The two core trusts together hold 51 per cent in Tata Sons.
On the Dorabji Tata Trust, trustees Darius Khambata and Prameet Jhaveri supported Mistry, while on the Sir Ratan Tata Trust, Noel Tata and the same trustees (Srinivasan and Singh) opposed him, with Khambata and Jehangir H Jehangir voting in his favour.
Trustees at Tata Trusts have veto rights and the power to nominate one-third of the Tata Sons board members. As of now, Tata and Srinivasan are the nominee directors of the Trusts on Tata Sons board.
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Differences among the trustees reportedly surfaced after the Mistry camp voted against the reappointment of Vijay Singh as the Tata Trusts’ nominee on the Tata Sons board. In the same Tata trusts meeting held in September, Noel Tata had also opposed Mistry’s nomination to the board of Tata Sons as a Trusts nominee.
Tata Trusts and Mehli Mistry did not respond to emailed queries on the matter.
Lawyers said the option before Mistry is to seek the intervention of either the Charity Commissioner or the courts in the ongoing dispute.
Last week, Venu Srinivasan secured unanimous approval from all trustees for his reappointment. This was after Home Minister Amit Shah and Finance Minister Nirmala Sitharaman intervened in the dispute seeking stability at the Tata group. The meeting was attended by Tata, Srinivasan, Khambata and Tata Sons Chairman N Chandrasekaran.
Mistry, while approving Srinivasan’s tenure, added a caveat that renewals should be reciprocal for all trustees and such renewals are automatic, effectively granting life trusteeship. But the other trustees hold a different legal interpretation, sources said.
Following Ratan Tata’s passing last year, the Tata Trusts trustees had passed a resolution stating that trustees would receive life tenure upon renewal. The legal fraternity remains divided over the validity and interpretation of this clause.
Mehli Mistry is related to the Shapoorji Pallonji family, which holds about 18 per cent stake in Tata Sons. Shapoorji group has been locked in a long-standing corporate dispute with the Tata Group since the ouster of Cyrus Mistry as Tata Sons chairman in 2016. Meanwhile, Mehli Mistry’s ties with the SP Group remain strained.
All this comes ahead of a possible listing of Tata Sons — mandated by the Reserve Bank of India after it categorised Tata Sons as an upper level NBFC.
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