NGOs working with Tata Trusts alarmed over boardroom battle2 min read . Updated: 13 Dec 2016, 02:08 AM IST
NGOs have raised an alarm over 'unwarranted questions being asked about Tata Trusts' and the development work done under their aegis
Mumbai: Non-governmental organisations (NGOs) working with the Tata Trusts have expressed concern at the recent boardroom battle that the Tata group is engaged in with Tata Sons Ltd’s ousted chairman Cyrus Mistry.
In a joint letter to the board members of Tata group companies including Tata Consultancy Services Ltd, Tata Motors Ltd, Tata Chemicals Ltd, and Tata Power Co Ltd, these NGOs have raised an alarm over “unwarranted questions being asked about Tata Trusts" and the development work done under their aegis, a statement on Monday said.
The letter written by heads of various NGOs including Pradan, Seva Mandir, Srijan, Action for Social Development, Foundation for Ecological Security and Aga Khan Rural Support Programme, appealed to the stakeholders of Tata group to ensure that the work of the Trusts is protected.
“But Tata Trusts have unwittingly been drawn into a boardroom battle that could impede the development work the Trusts are engaged in. If not protected, millions of have-nots of India stand to be affected across a country that is starved of real philanthropy," the statement said.
In a letter to shareholders last week, Mistry said the government has an “inherent obligation" to “remedy and repair (the) breakdown" in the governance of Tata Trusts, the dominant shareholder in the group holding company. He said the governance structure of the Tata group needs urgent repair and accused Tata Trusts of overstepping its rights.
Mistry said Ratan Tata and N.A. Soonawala, trustees of the Tata Trusts, took the veto rights of trust-nominated directors as an “entitlement to dictate to these directors how Tata Sons should conduct itself".
Tata Trusts, the principal shareholder of Tata Sons, are known for their philanthropic work, governance and ethical way of doing business. The Trusts have previously talked about declining dividends and a “trust deficit" under Mistry’s watch.
The Trusts are not a single entity, but consist of at least 15 different trusts that work in areas ranging from healthcare to education. The shareholding of the Tata Sons is also dispersed across these trusts; the largest trust shareholder is Sir Dorabji Tata Trust with 27.98% followed by Sir Ratan Tata Trust with 23.56%.
Tata Trusts own two-third of the stock holding of Tata Sons, the flagship company of the Tata group of companies. The Trusts are executing close to 900 projects through over 450 partners, helping millions of households in Indian states.