Tata Trusts' VCs rebut claims by trustee Khambata

Mumbai: In a November 11 response to Darius Khambata's letter, Tata Trusts vice chairmen Vijay Singh and Venu Srinivasan refuted his criticisms of events at Tata Sons. The letter questioned whether Khambata's primary concern was maintaining the Tata model or controlling the Trust's leadership over Tata Sons. While they acknowledged his sincerity, they deemed his account lacking in critical aspects. Singh emphasized that independence entails holding allies to the same standards as critics.

Khambata's November 2 letter to Tata Sons chairman Noel Tata criticized the company's interaction with the RBI on its regulatory status, as well as concerns over the proposed listing and governance issues within the Tata Group. Singh rejected the notion that Tata Sons' engagement with the RBI was either unproductive or unsuccessful.

Talks commenced in 2023, leading to debt repayment and a deregistration application in March 2024. Trustees remained apprised, and none, including Khambata, deemed the effort insufficient at the time.

Following a two-year review, the RBI concluded that Tata Sons remains a systemically significant NBFC subject to the listing framework. Khambata asserted that meaningful advocacy for preferential treatment did not align with the Tata ethos. Singh and Srinivasan observed no evidence supporting Khambata's claim that listing posed an existential threat.

They pointed out that foundation-backed entities such as Novo Nordisk, Hershey, Lundbeck, and Demant are listed, as is TCS, whose association with Tata has never been questioned. Listed Tata Group companies, including TCS, Tata Steel, Tata Power, and Tata Motors, have undertaken long-term, nation-building initiatives, such as the turnaround of Jaguar Land Rover and the advancement of electric vehicles.

The Trusts would retain their shareholder status, with dividends and philanthropy remaining unaffected, eliminating any decoupling. Invoking JRD Tata's "Whatever India needs" statement, Singh contended that national service encompasses respect for laws and institutions, even when a regulator's decision is unwelcome. He queried whether Khambata's concern stemmed from the model or control. The Trusts, as tax-exempt charities, would continue as shareholders while maintaining their philanthropic responsibilities.