Tata Trusts, which controls India’s largest conglomerate, the Tata Group, has inducted chairman Ratan Tata’s half-brother Noel Tata on the board. The appointment is seen as paving the way for a potential successor to the present chairman.
Speculation about Noel’s entry has been gathering steam with the small but prominent Parsi community rooting for a Tata family member to helm the Trusts in the future. TOI had reported on the likelihood of Noel, who is chairman of Trent and MD of Tata International, finding a seat on the board of the Trusts in its December 13, 2018 edition.
With trustees having no retirement age, Ratan Tata, 81, is expected to continue as chairman. The appointment of Noel, 62, however, comes at a time when the Trusts is battling allegations of income tax law violations and managing trustee R Venkataramanan steps down.
With Noel’s induction, all three Tata brothers are now on the board of the Trusts, which disbursed Rs 1,200 crore in fiscal 2018 for philanthropic projects. Ratan Tata’s younger brother Jimmy has been a trustee for nearly three decades. Several Parsis, including trustee Noshir Soonawala, have been expressing concern to Ratan Tata over the lack of representation from the community on the board of the Trusts, which has played a key role in the social sector besides being at the forefront of Indian industry through the $111-billion salt-to-steel Tata Group.
Jehangir H Jehangir, a fellow Parsi and philanthropist spearheading the Jehangir Hospital in Pune, was also appointed on the board on Wednesday.
The low-key Noel Tata who makes his entry on the Tata Trusts board, has been rarely seen with its present head Ratan Tata. His interactions with Ratan Tata despite his role as a group director have been limited. However, in the recent past their equations have changed.
“At the Tata leadership summit last July, Noel and Ratan Tata went back home together in the same car,” said a Tata executive. Noel had also backed Ratan Tata in the battle against Cyrus Mistry, former group chairman and his brother-in-law. Ratan Tata is also known to be close to Noel’s three children, who work in the conglomerate.
While heading Tata International, the smaller among group companies, Noel has found mention as a possible contender for the Tata Sons chairman’s post. His entry into the Trusts would now be the most prominent role he has been cast in. According to Tata Sons’ Articles of Association, Trusts can nominate one-third of directors on the holding company’s board. There is speculation that Noel may soon represent Trusts’ interests on Tata Sons board as well. Noel’s entry coincides with Venkataramanan (Venkat), who has been overseeing the Trusts’ operations for the last five years, exiting.
The announcement did not name a replacement for Venkat. TOI had reported on Venkat’s impending exit on February 8.
Speculation is that R Pavitra Kumar could be given interim charge as CEO of the Trusts. Venkat has been under the Income Tax department’s scrutiny for noncompliance of rules.
The department withdrew tax exemptions of the Trusts on account of Venkat’s salary that ran into a few crores, stating that the income drawn by the managing trustee was beyond the permissible limit under the rules. The department had sought to cancel Trusts’ licences for non-compliance of rules on usage of funds. Some time ago, Venkat was also named in a corruption case by CBI for allegedly breaking rules to obtain a flying licence for Air Asia India.
He is expected to be shifted into another role within the Tata group.