Sharad Pawar backs Tata Trusts: 'Weakening the Trusts weakens institutions'

Nationalist Congress Party-Sharadchandra Pawar President Sharad Pawar on Tuesday backed the position taken by Tata Trusts in the ongoing dispute with Tata Sons, saying the group's charitable ownership structure and the Trusts' rights must be protected.

"We must protect the Group that devoted itself to the development of India," Pawar said in a post on X.

Pawar's stance is similar to that of Tata Trusts, which has challenged the Tata Sons board's decision to reappoint N Chandrasekaran as executive chairman. The Trusts have argued that their nominee directors have affirmative rights on key decisions under the company's Articles of Association.

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The NCP-SC chief said the Tata Group's ownership structure was deliberately built around philanthropy, following the vision of founder Jamsetji Tata and carried forward by Sir Dorabji Tata and Sir Ratan Tata.

"Their holdings were placed in trusts precisely so that no individual would own the group, and the majority stakeholder of the business would be by trusts that are dedicated to charitable objectives," he said.

He noted that Sir Ratan Tata Trust and Sir Dorabji Tata Trust, along with allied trusts, own about 66% of Tata Sons. "This design is deliberate, not incidental," Pawar said, adding that dividends from the Trusts' majority stake fund public causes, including health, education, research, and rural livelihoods.

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The former union minister also highlighted institutions such as Tata Memorial Hospital, TIFR, TISS, and NCPA in Mumbai, saying they were part of the Tata Group’s philanthropic legacy.

"Weakening the Trusts weakens institutions the Country's and State's people depend on," he said.

Pawar backs Trusts' stand on board vote

The Tata Sons board voted 4-1 on September 17 to reappoint Chandrasekaran as executive chairman for another five years from February 2027.

The board also approved steps towards listing Tata Sons. Noel Tata, chairman of Tata Trusts, voted against both proposals, while the Trusts’ other nominee director, Venu Srinivasan, voted in favour. Tata Trusts collectively own about 66% of Tata Sons.

The Trusts have said the Chandrasekaran reappointment is invalid from the outset. Their argument is that the Articles of Association require the affirmative support of a majority of Trust-nominated directors for the chairman’s appointment. With two such directors, the Trusts contend that both must support the resolution.

Pawar said the Articles adopted by shareholders, which give Trust-nominated directors an affirmative vote on key decisions including the chairman’s appointment, "should be honoured".

"The Articles of the Group give the majority owner's nominees a decisive voice in choosing the Chairman, and that agreement should be respected, as that is the very design of the Tata Group," he said.

'Through dialogue and due process'

The NCP-SC President said leadership decisions should be settled with the consent of Tata Trusts as the majority owner, "through dialogue and due process rather than disputes."

He also referred to the Supreme Court's earlier recognition of the affirmative rights of Trust-nominated directors.

Pawar said Maharashtra was fortunate to be at the heart of the Tata legacy and described the Tata Group as "a national institution rooted in Maharashtra".