Big week at Tata Trusts: Terms of two key trustees, Venu Srinivasan and Mehli Mistry, up for renewal

This week, Tata Trusts faces a pivotal decision as the tenure of trustees Venu Srinivasan and Mehli Mistry nears completion, requiring a revamp of the board, as mentioned in the report. Tata Trusts, which holds a majority stake in Tata Sons, has circulated a resolution seeking to renew Srinivasan’s term as trustee and vice-chairman of Sir Dorabji Tata Trust (SDTT).

According to a report in the Economic Times, Srinivasan’s term ends on Monday. Mehle Mistry’s term is also renewable.

Once approved, these appointments give a lifetime tenure, impacting the management of the Trusts and Tata Sons. SDTT’s Board of Directors includes Noel Tata, Srinivasan, Vijay Singh, Pramit Jhaveri, Millie Mistry and Darius Khambatta. Internal consensus is crucial for these appointments, which come amid divisions among trustees and close scrutiny of the Tata Sons’ role in strategic national sectors.

According to the report, renewal of trustee in Tata Trusts requires unanimous approval. A formal reappointment must occur before a lifetime position can be granted. If even one trustee does not agree, the renewal will not take place, a person familiar with the matter said. Recent divisions have made this process more complex, as any opposition could prevent renewal. The trusts have not commented publicly, but sources say the board is keenly aware of the need for alignment.

On the other hand, the government is monitoring the situation, as Tata group companies are involved in major national projects in electronics, defence, and other strategic areas.

The Tata Trusts collectively own 66 per cent of Tata Sons, while SDTT and Sir Ratan Tata Trust (SRTT) together own about 51 per cent. The Mistry family of Shapoorji Pallonji Group is the largest minority shareholder with 18 per cent.

Noel Tata’s term as Chairman of Tata Trusts and SDTT was renewed for life in January after his three-year trustee term expired. This move set a precedent for lifetime appointments upon renewal, making this round of renewals particularly significant. Without a dispute resolution mechanism in trust deeds, the process depends on the cooperation of the trustee.

The divisions have persisted since September, when four trustees – Darius Khambatta, Millie Mistry, Pramit Jhaveri and Jehangir Jehangir – voted to remove Vijay Singh from the Tata Sons nomination, breaking with precedent. They then proposed Mohli Mistry to the Tata Sons board, but this was blocked by Noel Tata, Venu Srinivasan and Vijay Singh. These events have shaped the current atmosphere, with some trustees now seeking to avoid further conflict.