Tata in the spotlight: Two key Trust renewals this week as Srinivasan's term ends and Mehli Mistry awaits renewal

This week could prove pivotal for Tata Trusts —and, by extension, for Tata Sons—as the terms of trustees Venu Srinivasan and Mehli Mistry come up for renewal. Once approved, these appointments are effectively for life. On Saturday, Tata Trusts circulated a resolution seeking the renewal of Srinivasan’s term as trustee and vice-chairman on the board of the Sir Dorabji Tata Trust (SDTT). The term ends Monday.

The SDTT board comprises Noel Tata, Srinivasan, Vijay Singh, Pramit Jhaveri, Mistry and Darius Khambata. Mehli Mistry’s term is up for renewal in a couple of days.

Tata Sons, the holding company of the Tata Group, is 66% owned by Tata Trusts. SDTT and the Sir Ratan Tata Trust (SRTT) dominate, holding about 51% of Tata Sons. The Mistry family of the Shapoorji Pallonji (SP) Group holds an 18% stake in Tata Sons. The government is keen on ensuring stability at Tata Sons, especially as Tata Group companies are engaged in key national projects in electronics, defence and other strategic sectors, according to people with knowledge of the matter.

The term renewals, which require unanimous approval, have become a point of contention among trustees, following the divisions that have emerged.

A formal reappointment must first be made before a lifetime term can take effect, sources said. “If even one trustee does not approve, the renewal does not go through,” said a person familiar with the matter.

A trustee added, “A lifetime trustee must have full legitimacy, for which unanimous approval is a necessary prerequisite.”

Tata Trusts did not comment.

“A conflict over the renewals seems unlikely this time, given the growing sense that the authorities are keeping a close watch. But we’ll handle matters as they unfold,” said a trustee.

Another cautioned that objections from certain quarters could still arise. “Trouble can’t be ruled out—it could go either way, and everyone is watching closely,” he said.

The division within Tata Trusts has distracted the Tata Group, insiders said. “Everyone is concerned with the Trust matters,” a group executive said. Noel Tata 's term as chairman of Tata Trusts and that of SDTT was renewed for life in January, when his three-year term as a trustee ended.


TENSIONS WITHIN
The renewal issue has kept internal tensions at the Trusts simmering. According to one trustee, the “opposite rank and strength has been broken,” signalling that a conflict as happened in September may be unlikely.

Some trustees may stay away from further conflict, choosing instead to maintain a distance as the Trusts brace for what many insiders describe as a crucial test of unity and governance, insiders said. It was during Noel Tata's appointment as Tata Trusts chairman last year that a resolution was passed that all current terms would be for life after they are renewed. The Trust deeds don’t seem to offer a path toward resolution for the current conflict.

The divisions in Tata Trusts emerged when four trustees--Darius Khambata, Mehli Mistry, Pramit Jhaveri and Jehangir Jehangir—broke precedent by voting to remove a fellow nominee trustee, Vijay Singh, from the Tata Sons board on September 11. They then suggested the nomination of Mehli Mistry to the Tata Sons board. That was blocked by chairman Noel Tata, vice chairman Venu Srinivasan and Vijay Singh, who remains a Tata Trusts trustee.

Among the far-reaching ramifications that could ensue from the current conflict is the future status of Tata Sons. Tata Trusts had passed a resolution in July that Tata Sons remain a privately held company, a stance that could now be revisited.