Tata Trusts’ action full of mistrust

Tata Trusts is chaired by Ratan Tata and governed by more than 20 trustees.

Apart from allegations of mismanagement in the group, Cyrus Mistry had also alleged inappropriate interference and misgovernance by Tata Trusts, which holds 66% stake in Tata Sons, in the business decisions of the group.

Tata Trusts is chaired by Ratan Tata and governed by more than 20 trustees. It was instrumental in sacking of Mistry as chairman on October 24, 2016.

Mistry also accused the trustees of insider trading, who sought day-to-day details about business of listed Tata group companies.

“…the trustees used to call for unpublished price sensitive information from listed Tata operative companies ignoring the (Sebi) regulations,” Mistry had stated in his petition before the NCLT Mumbai.

According to Mistry, the trustees of the trust were entitled to nominate three Trusts’ nominee directors and all decisions would need the affirmative vote of the majority of those directors. He claimed that the trustee nominee directors could overrule the entire board of directors with their vote, leading to suppression of minority shareholders.

In one such instance, Mistry said two nominee directors left the meeting in the middle to seek instructions from Ratan Tata on the issues being discussed.