Mistry wants govt intervention in Tata Sons affairs

Writes to shareholders of 6 Tata firms

Ousted Tata Sons Chairman Cyrus Mistry has sought the intervention of the Centre in the functioning of Tata Trusts as the latter enjoy many sops from the government, including tax exemptions.

“The role, functions and actions of the trustees of public charitable trusts are governed by special law. In the absence of an appropriate governance structure and ethical behaviour of trustees, it would become an inherent obligation of the government to remedy and repair breakdown in the governance of such trusts,” Mistry said in a letter to the shareholders of six listed companies of the Tata Group.

Therefore, in managing the trust property, the conduct of the trustees who oversee the properties and functions of public charitable trusts has to be of the highest order, Mistry said.

Currently, 66% of the share capital of Tata Sons is held by Tata Trusts. Tata Sons, a core investment company, is the promoter of the Tata Group companies. Tata Sons had requested for extraordinary general meetings of many Tata Group companies to oust Mistry and Nusli Wadia as directors of those firms.

According to Mistry, the Tata Group faces challenges in corporate governance standards due to the complex relationships between Tata Trusts and Tata Sons. “Towards this end, it became evident to me that the Tata Group needs the highest norms of corporate governance – something beyond just the imagery that the name evokes and something that is truly institutionalised with rigour and discipline,” Mistry said.

“That approach faces a severe challenge from the complex inter-relationships between Tata Trusts and Tata Sons, and between Tata Sons and the Tata Group companies, such as your company,” Mistry added.

Mistry, in the letter, also took a veiled dig at Ratan Tata, stating that the Tata Group is not the personal fiefdom of anyone. “The Tata Group is no one’s personal fiefdom; it does not belong to any individual, not to the trustees of Tata Trusts, not to the Tata Sons directors, and not to the directors of the operating companies. It belongs to all the stakeholders, including everyone of you,” Mistry said.

“I, therefore, urge all of you to think beyond the here and now. I urge you to have your voice heard loud and clear. I ask you to be a part of defining the future,” Mistry said.