Tata Trusts row escalates after Vijay Singh demands probe into 1989 share deal

The controversy surrounding a nearly four-decade-old transfer of Tata Sons shares has escalated, with Tata Trusts vice chairman Vijay Singh writing to the Maharashtra Charity Commissioner seeking an independent investigation into the transaction. Singh said such an inquiry would help restore public confidence in the administration of the Tata Trusts and preserve the institution's credibility and reputation.

In a letter dated June 10, reviewed by The Economic Times, Singh requested a probe into the transfer of 833 Tata Sons shares from the Navajbai Ratan Tata Trust to late industrialist Naval Tata in 1989. The move came after Singh received a legal notice alleging that the transaction amounted to an unlawful diversion of charitable assets into private hands.

According to the letter, the notice raised several questions, including whether there was any legal necessity for the transfer, whether proper documentation existed, and whether the trust received adequate consideration based on an independent valuation of the shares.

The latest development follows a fresh complaint filed with the Maharashtra Charity Commissioner by petitioner Suresh Tulsiram Patilkhede. Patilkhede had earlier approached the regulator over alleged irregularities in the Sir Ratan Tata Trust, prompting official action. In the new complaint, he sought an investigation into the 1989 transaction and urged authorities to safeguard the interests of public charitable trusts.

The complaint also highlighted a potential conflict of interest involving Tata Trusts chairman Noel Tata. Since Noel Tata is one of Naval Tata's heirs, the complaint argued that he should not participate in any deliberations related to the issue.

"As a trustee of the Sir Ratan Tata Trust as well as the Navajbai Ratan Tata Trust, I feel it is my duty to request an independent enquiry into both the legality and propriety of the transfer of these shares, so that the factual position is conclusively established," Singh wrote in his communication.

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Singh noted that while the Tata Trusts had publicly rejected allegations relating to the transaction, their response did not provide detailed explanations regarding the circumstances of the share transfer. He also referred to the Trusts' reliance on the approval of eminent jurist Nani Palkhivala, saying it remained unclear whether a formal legal opinion existed on record or whether Palkhivala's consent had been provided in his capacity as a trustee.

The vice chairman further pointed out that the allegations involve a transaction that ultimately benefited members of Naval Tata's family, some of whom continue to hold influential positions within the Tata Trusts. He clarified that he was not casting aspersions on any individual but maintained that any denial issued under such circumstances could create a perception of conflict of interest.

"Since Mr Noel Tata, a direct beneficiary of the share transfer, is presently chairman of the Tata Trusts, it could be inferred that a denial authorised by him does create a conflict-of-interest situation, without casting any aspersions on anyone," Singh stated.

He urged the Charity Commissioner to initiate an independent inquiry under the Maharashtra Public Trusts Act, 1950, to determine whether the transfer complied with laws prevailing at the time.

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The controversy stems from a complaint filed on June 4 by Patilkhede, represented by advocate Katyayani Agrawal. The complaint alleged that the transfer took place on January 18, 1989, just a week after Naval Tata resigned as a trustee of the Navajbai Ratan Tata Trust. It further claimed that the transaction lacked legal necessity, was unsupported by a valid instrument of transfer and was carried out without consideration, making it unlawful under principles governing public trusts.

The Tata Trusts have strongly denied the allegations. In a statement issued earlier, they said any suggestion of impropriety involving the Sir Dorabji Tata Trust, the Navajbai Ratan Tata Trust or parties connected with the transaction was "categorically denied."

The Trusts described the accusations as part of a "wilful, malicious and orchestrated campaign" aimed at tarnishing an institution that has been engaged in philanthropic activities in India for more than 130 years. They also said they would pursue appropriate legal remedies to protect their reputation and goodwill.