MUMBAI: Following the showdown between Tata Trusts chairman Noel Tata and the board of Tata Sons, a trustee of the Tata Education and Development Trust (TEDT) has objected to potential legal costs from what he described as “created” disputes, according to people familiar with the matter.In a letter to TEDT trustees, who include Noel, Mehli Mistry described the litigation between trustees, Tata Trusts and Tata Sons as “unprecedented over the past 150 years”. The Trusts have indicated they will seek legal recourse against the Tata Sons board resolution approving a new five-year term for chairman N Chandrasekaran. The directors also favour a public listing to comply with Reserve Bank of India norms. Noel has objected to the listing.TEDT “will not pay any part of legal expenses towards these created disputes”, wrote Mistry, because it does not hold shares in Tata Sons. He asked for his objection to be tabled and recorded at the trust’s next board meeting. When contacted, Mistry declined to comment.TEDT, set up by the late Ratan Tata in 2008, has the largest corpus among the Trusts at Rs 5,600 crore while Tata Sons’ equity is held mainly through Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT). Mistry was also an SRTT and SDTT trustee before fellow trustees including Noel voted against renewing his term last October.
Mehli’s description of the dispute being “created” stems from the resolution that he, Noel and other trustees had signed last year unanimously approving a new five-year term for Chandrasekaran. Trusts forwarded it to the Tata Sons board.The question of which of the trusts will pay if the issue goes to court matters because of a regulatory ban on SRTT. It faces allegations of breaching the Maharashtra Public Trusts Act over board composition; the ban restricts its use of funds. Administrative and legal costs have traditionally been apportioned according to the work each trust requires. Where the work is common to all, the costs are shared across the wider network, people familiar with the issue said.The last big governance fight, the litigation with former Tata Sons chairman Cyrus Mistry and Mistry-linked companies, which own a minority stake in Tata Sons, was costly. Tata Sons and Trusts together spent about Rs 200 crore on legal fees, veterans of that battle recalled. The Mistry side spent about Rs 50 crore.
