Chairman Ratan Tata and other trustees of Tata Trusts are in a huddle to quickly nominate representatives on the board of Tata Sons, people close to the development said. Tata Trusts can nominate one-third of directors at the group holding company, but it falls short on the count following the recent exits of Amit Chandra and Vijay Singh, and of Nitin Nohria earlier. TVS Group’s Venu Srinivasan, vice-chairman of Tata Trusts, who was inducted as a non-executive director at Tata Sons in August 2016, is now formally a trust nominee on its board, one of the people said. The number of directors on the Tata Sons board is usually 11, but can go up to 13, the person said. Ratan Tata is likely to make the final decision in this regard.
The trusts may also shortly name a candidate from the Tata universe as its chief executive, following exit of R Venkataramanan who was also managing trustee, the people said. Some of the likely Tata insiders for the CEO’s role are N Srinath, managing director of Tata Teleservices; Sanjay Ubale, head of infrastructure & urban solutions at Tata Sons; and Praveen Kadle, who was heading Tata Capital until April 2018 before moving to another role within the group, they said.
An email sent to Tata Trusts seeking comment remained unanswered till the time of the publication of this report. An official close to the Trusts cited a previous statement that a committee of trustees, comprising chairman Ratan Tata, Vijay Singh and Venu Srinivasan, was established to select the CEO. Tata Trusts, chaired by Ratan Tata, is the largest shareholder of Tata Sons with a 66% equity ownership. The trusts include Sir Dorabji Tata Trust, Sir Ratan Tata Trust, JRD Tata Trust, RD Tata Trust, Tata Education Trust, Tata Social Welfare Trust and Sarvajanik Seva Trust.
Bain Capital managing director Amit Chandra stepped down from the Sir Ratan Tata Trust in November 2018 and the Tata Sons board in February 2019. Vijay Singh stepped down from Tata Sons board after reaching the retirement age of 70, while Nitin Nohria quit in mid-2018. Meanwhile, the post of the CEO at the Trusts has been delinked from the title of managing trustee, following a tax row over the remuneration of Venkataramanan in his dual role. According to some sources, Venkataramanan would be given a posting in the vast universe of the Tata Group, possibly outside the country. But this could not be verified. “A CEO is usually not on the board of trustees… he can carry out the duties assigned to him or her by the board of trustees,” said Sanjay Ashar, a partner at law firm Crawford Bayley & Co. “And, there is no legal requirement to have a managing trustee. CEO is sufficient.” The Income Tax Department recently withdrew tax exemption given to Sir Dorabji Tata Trust as Venkataramanan’s salary had exceeded the permissible tax bracket. “The Income Tax Department’s recent decision highlighted the conflict between the provision under the trust deed for a salary of trustees and the actual salary of the managing trustee,” said Ravi Singhania, managing partner of law firm Singhania & Partners. “To balance the provision and the role envisaged under the deed, and still be able to find a capable CEO, the separate position of the CEO was a must.” Venkataramanan is also being examined as part of the Central Bureau of Investigation’s inquiry into allegations that AirAsia India — Tata Sons’ joint venture with Ariasia Berhad of Malaysia — used illegal tactics to lobby for a change in India’s aviation policies.
Tata Trusts was in the public eye also following the recent exit of one of Ratan Tata’s oldest and trusted aides, NA Soonawala, citing health reasons. Soonawala’s exit surprised those close to the developments since he is seen fit for his age and sharp on financial matters. He was seen as instrumental behind the recent appointment of Noel Tata as a trustee of the Sir Ratan Tata Trust.