Winning Bizness Desk

Mumbai.The Maharashtra Charity Commissioner has issued a notice to Tata Trusts seeking its response by October 12 following a complaint by trustee Venu Srinivasan, who has alleged governance-related irregularities in the Sir Dorabji Tata Trust. Srinivasan, honorary chairman of TVS Motor Company and a trustee of Tata Trusts, had sought an inquiry into the matter on September 24.

His complaint raises questions over the role of Tata Trusts in commercial decisions and the manner in which the charitable organisation is being governed.

Srinivasan raises questions over trust governance

According to Srinivasan, Tata Trusts has moved away from its core charitable purpose and is increasingly involved in business decisions concerning Tata group companies.

He has alleged that trustees have been directly involved in deciding, negotiating and finalising major commercial transactions involving Tata Sons. The complaint questions whether such involvement is consistent with the objectives and rules governing a charitable trust.

Four key concerns raised in complaint

The complaint reportedly highlights several issues relating to the functioning and governance of the trust:

• Direct involvement of Tata Trusts in commercial transactions of Tata Sons.
• Questions over whether such involvement is consistent with the charitable purpose of the trust.
• Concerns over the process and rules followed while appointing new trustees.
• Objections to Noel Tata being given a status that allows him to remain a trustee for life.
• The allegations have brought the internal functioning of one of Tata group's key charitable institutions under scrutiny.

Tata Trusts had approached Charity Commissioner earlier

Tata Trusts had filed petitions before the Charity Commissioner on September 30, seeking to ensure that no order was passed on Srinivasan's complaint without giving the trust an opportunity to present its case. The latest notice now gives Tata Trusts time until October 12 to submit its response. The Charity Commissioner will consider the trust's submissions before deciding the next course of action.

Another Tata trust already faces separate dispute

The development comes at a time when another Tata trust, the Sir Ratan Tata Trust, is facing a separate dispute. The Charity Commissioner had earlier stopped board meetings of the Sir Ratan Tata Trust amid a dispute over the appointment of trustees.

Although the two matters are separate, both involve questions about the functioning and governance of Tata charitable trusts.

What happens after Tata Trusts responds

The October 12 deadline is now the immediate focus of the case. After receiving Tata Trusts' response and hearing its position, the Charity Commissioner will decide whether the allegations warrant further inquiry or any legal action. The proceedings could also bring greater scrutiny to the way major charitable trusts are governed and how their trustees exercise their powers.

Knowledge box: What is Sir Dorabji Tata Trust?

Established in 1932, the Sir Dorabji Tata Trust is one of the principal trusts within Tata Trusts. It supports initiatives in areas including education, healthcare and disaster relief.

Under the Maharashtra Public Trusts Act, the Charity Commissioner has powers to examine the functioning of public trusts, including matters relating to their funds, administration and appointment of trustees.