Tuesday, January 18, 2022

Ratan Tata not to step down as Tata Trusts chairman now

Tata Trusts was instrumental in the sacking of Cyrus Mistry on October 24.

By: ENS Economic Bureau | Mumbai |
December 17, 2016 1:10:00 am
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Tata Sons interim chairman Ratan Tata on Friday said he was not stepping down as chairman of Tata Trusts, the largest shareholder in the Tata group’s holding company, “at this point of time”. “Further to news reports that have appeared in the media, Ratan Tata, interim chairman, clarified that there are no plans for his stepping down from the chairmanship of the Tata Trusts at this point in time,” Tata Sons said in a statement.

“The reference to the media discussion with some Trustees relate to the process being put in place for the leadership succession in the Trusts in the future, to enable an ordered and smooth transition of leadership,” it said. Tata also emphasised that the Trusts were undertaking many initiatives that had national impact and he is looking forward to continuing his involvement with these initiatives in the Trusts. However, Tata indicated that a succession plan was in the offing. “He was however keen that a process should be in place for a smooth succession at an appropriate time,” Tata Sons said. Tata Trusts owns 66 per cent stake in Tata Sons.

Cyrus Mistry, who was ousted as Tata Sons chairman had earlier asked the government to intervene in the functioning of Tata Trusts, alleging mis-governance and inappropriate interference in the business decisions of the group. “At the heart of the sustainability the Tata group is governance reform, throughout in the institution. This would mean the Government ensuring the working of Tata Trusts, which are public charitable trusts, the property of the people of India, have a defined, transparent governance structure,” Mistry wrote in a letter to shareholders of Tata companies.

Tata Trusts was instrumental in the sacking of Mistry on October 24. Since then Mistry has raised questions around the governance structure of Tata Trusts, which has an all encompassing control of the Tata group companies. After Tata Trusts, Mistry’s Shapoorji Pallonji is the second largest shareholder in Tata Sons with around 18 per cent stake.

“The conferment of all decision making power in one man or a “high command” among them is unethical, improper and breach of trust. It is critical that serious decisions of severe magnitude and consequence are not taken whimsically, without much thought, or for unstated collateral objectives,” Mistry wrote in the letter.

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