How Tata Sons AGM has changed after Ratan Tata’s passing

Tata Sons’ AGM, scheduled on 14 August at the Bombay House, the corporate office of the Tata Group, will be attended by the nine board members of Tata Sons, including Noel Tata, who is also the chair of Tata Trusts. Noel is the single largest individual shareowner of Tata Sons, owning 1% of shares. In addition to being a board member of Tata Sons, he will be attending the meeting in his personal capacity as a Tata Sons shareholder, according to an executive privy to the development.

The attendance is significant for two reasons. First, it marks a departure from the past when former chairman Ratan Tata was the sole representative of Tata Trusts at the Tata Sons shareholder meetings. Noel, who participated in the AGM proceedings, attended in his personal capacity.

In October last year, Noel took over as the chair of Tata Trusts after the demise of his half-brother, Ratan Tata. However, 10 months into Noel’s tenure, it appears that the philanthropic entities that own Tata Sons have no single individual wielding “absolute power”, according to an executive.

Sir Dorabji Tata Trust and Sir Ratan Tata Trust, the two largest shareholders, owning 27.98% and 23.56% of Tata Sons, will be represented by Vijay Singh, former defence secretary and Mehli Mistry, a businessman and a close confidante of the late chairman Ratan Tata.

Noel’s three children, Leah, 39, Maya, 36, and Neville, 32, will be representing the smaller Tata Trusts that own shares in Tata Sons, according to an executive privy to the development. Finally, Tushad Dubash, 42, will also be attending the AGM as he is one of the trustees of the RD Tata Trust. Dubash is the son of Behram Dubash, a businessman. Behram was a close associate of late Ratan Tata, having attended school with the late industrialist.

Also in attendance will be a representative from the Shapoorji Palonji Group, which owns 18.38% of Tata Sons.

Beginning early 2023, Noel’s three children began serving on the board of smaller Tata philanthropic entities. Presently, the children are on the boards of six of the 15 charitable entities, which comprise the Tata Trusts. The Tata scions joined the board under Ratan Tata.

An email sent to Tata Trusts CEO Siddharth Sharma seeking a comment went unanswered.

“Tata Trusts, by nominating Vijay Singh and Mehli Mistry to represent the two primary trusts, have indicated that there is no longer a singular head with absolute authority over the group’s flagship trust following Ratan Tata’s death,” said the executive.

This lack of one leader commanding the philanthropic entities is underscored by the decision of Tata Trusts late last year, instituting an executive committee, comprising Noel, Srinivasan, Singh, and Mehli Mistry. This committee shares equal authority in executing decisions made by the board of Tata Trustees.

It is also important that Sir Ratan Tata Trust is the only charitable entity that wields the veto vote, which can prevent any resolution from being implemented. For this reason, Mehli Mistry, representing Sir Ratan Trust, has a crucial role in the proceedings inside the Tata Trusts.

Tata Trusts, which owns 65.9% of Tata Sons, has three nominees on the board of Tata Sons. Besides, Noel and Vijay, Venu Srinivasan, chairman emeritus of TVS Motor Ltd, is the third representative of Tata Trusts on the nine-member Tata Sons board.

Tata Sons’ shareholder meeting will approve the appointment of Noel Tata as a board member. Also on the agenda are the re-appointment of board members, Venu Srinivasan and independent director Anita Marangoly George, according to the AGM notice.

More representation from Tata Trusts at the shareholder meeting of Tata Sons comes on the back of a missive from the parent philanthropic entity to Tata Sons chairman Natarajan Chandrasekaran to explore all possible options to ensure that the holding company of the Tata Group remains private even as the deadline for going public ends on 30 September, Mint reported in its edition dated 31 July. Significantly, Tata Trusts has requested that Tata Sons continue discussions with the Shapoorji Pallonji Group to provide an exit to the largest minority shareholder.