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2 flagship Tata Trusts may end up with separate heads

MUMBAI: Tata Trusts may consider having separate chairpersons for its two flagship foundations, Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT), which together own a majority stake in the holding company that controls the $103-billion aviation-to-automobile conglomerate. Currently, both foundations, which have a combined shareholding of about 52% in Tata Sons, are headed by one person — Ratan Tata.

Historically, the two public charitable organisations were headed by different individuals. It was only from 1995 onwards that both trusts have the same chairman in Ratan Tata (see graphic). When Ratan Tata succeeded his father Naval Tata as the chairman of SRTT in 1988, JRD Tata was chairman of SDTT. JRD held that position till his death in 1993. Earlier, when JRD Tata succeeded Ardeshir Dalal as chairman of SDTT in 1949, Navajbai Tata, the wife of Tata Group founder Jamsetji Tata’s second son Sir Ratan Tata, was leading the other trust. She served in that capacity till the time of her passing in 1965. Incidentally, that was JRD’s first stint as SDTT chairman since he again took the reins in 1969.
Sources said no final decision on having separate chair- persons for the two trusts has been reached, and the plan could change. The boards of the two trusts are scheduled to meet on August 16 to consider a resolution that will make the chairman of one or both trusts ineligible to become chairman of Tata Sons. Likewise, chairman of Tata Sons will not be eligible to become chairman of either of the two trusts. But, s/he can occupy the chairperson’s seat at either of the trusts after her/his retirement from the company.
This means whoever succeeds Ratan Tata at SDTT and SRTT will be barred from taking up the leadership role at Tata Sons. Ratan Tata will be the last person to have helmed the two trusts as well as Tata Sons. Current Tata Sons chairman N Chandrasekaran can become chairman of either of the two trusts only after he retires. Tata Trusts didn’t respond to TOI’s e-mailed queries.
While some Tata Group observers read these proposals as moves aimed at ensuring that power is not concentrated in a particular individual, others feel that this could complicate decision-making at the top. Succession at Tata Trusts is being closely watched by multiple stakeholders because of its influence on Tata Sons, and by implication on how the larger conglomerate will be managed, and on the domestic economy.

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