 "Tata Power board meets today to elect interim chief")
Even as the Tata Power board meets in Mumbai on Friday to elect a new interim chairman, Nawshir H Mirza, an independent director on the board, has said the Tata trusts should immediately reform themselves by drawing a new code of governance, making them accountable to the public.
“The Tata trusts are the richest in India, with assets worth over Rs 1,50,000 crore. The trusts were set up by our forefathers for the benefit of 135 crore Indians. As of now, there is absolutely no transparency on how a new trustee is inducted, how the finances are managed, or on succession as the trust laws are vague,” Mirza said. The trusts hold 66 per cent stake in Tata Sons, which in turn hold 33 per cent stake in Tata Power. As of now, Tata Sons is being used by the Tatas as a special purpose vehicle between the trusts and group companies, he said.
“Ratan Tata should set up a three-member committee consisting of one eminent person nominated by Tata trusts, another eminent person nominated by the Mistry family and the committee should be chaired by a highly respected retired Supreme Court judge. The committee should come out with a code of governance for the Tata trusts, change the bylaws, have clear rules on induction of new trustees and also what kind of persons are inducted on the trusts,” said Mirza, also chairman of nomination and remuneration committee of Tata Power. The code should be on the same lines as the Tata companies which has clear retirement age and code of conduct regulations. As of now, the trusts are full of businessmen and even the new trustees like Venu Srinivasan of TVS group and Amit Chandra are businessmen without any background in lifetime charity, he said.
“The trusts should appoint people with lifetime work in charity like former TISS (Tata Institute of Social Sciences) directors,” he suggested. Mirza said the decision making process in the trusts is not transparent at all considering two trustees Keki Dadiseth and Nasser Munjee supported Mistry during the board meetings of Indian Hotels and Tata Chemicals as independent directors.
“Whether they were consulted on Mistry’s ouster at the Trust level is still not known.”
Mirza said sharing of price-sensitive information by Tata Sons with the Tata trusts is a violation of Sebi insider trading regulations and can be challenged. “The fact that Tata said he will take the reasons for Mistry’s ouster is grave, is not the answer. As the trusts are national property and not any individual’s property, they must come out with full facts and be transparent to Indian people,” Mirza said.
When asked that he may face retribution by the Tatas like other independent director Nusli Wadia is facing now, Mirza said the issues are above individuals and is about the Trusts that are at the centre of the entire controversy.
A bitter feud broke out in the Tata group after Mistry was ousted as the Chairman of Tata Sons on October 24th and Tata was appointed as an Interim Chairman.