A legal notice has been sent to senior trustees and executives associated with the Tata group alleging that the transfer of valuable Tata Sons shares from a charitable trust to late industrialist Naval H Tata in 1989 was unlawful and amounted to a breach of fiduciary duty.
The notice, dated May 12 and issued by advocate Katyayani Agrawal on behalf of the complainant Sunil Tulsiram Patilkhede, has been addressed to several senior executives, including Tata Trusts Chairman Noel Tata; Tata Sons Chairman N Chandrasekaran; Tata Trusts Vice-Chairman Venu Srinivasan; Tata Trusts CEO Siddharth Sharma, and trustees Vijay Singh, Jehangir C Jehangir, Darius Khambata, Neville Tata and Bhaskar Bhat.
The current legal notice pertains to the Navajbai Ratan Tata Trust (NR Tata Trust), a public charitable trust established by Ratan Tata in 1974, in which Ratan Tata and Nani Palkivala were the initial Trustees. Subsequently, Naval Hormusji Tata was also added as a trustee.
According to the notice, the Sir Ratan Tata Trust transferred 625 equity shares and 34 preference shares of Tata Sons to the NR Tata Trust in December 1974 as a corpus donation. At that time the book value of the equity shares and preference shares were recorded at ₹7.8 lakhs.
The notice states that following a bonus issue, the NR Tata Trust’s equity holding increased to 833 shares. It alleges that after Naval H Tata resigned as trustee of the NR Tata Trust in January 1989, the 833 shares were transferred to him personally on January 18, 1989, for “nil” consideration.
According to sources those shares are now allegedly worth several thousands of crores.
‘Invalid transfer’
The complainant has alleged that there was no trustee resolution approving the transfer and no valid transfer deed or statutory documentation executed under Section 108 of the Companies Act, 1956. The notice further claims that the shares, which constituted trust property, were transferred at below fair value and without any demonstrated benefit to the charitable trust.
The notice contends that the transaction amounted to a breach of fiduciary duty and breach of trust and therefore constituted a “void transaction and a nullity”.
It further notes that after Naval Tata’s death in May 1989, the shares were transferred in 1993 to his successors — Simone Tata, Ratan Tata, Jimmy Tata and Noel Tata.
According to the notice, “a transfer of shares by a trust to an ex-Trustee in his individual and proprietary capacity, without fair value, is a classic case of breach of fiduciary duty and breach of trust,” and “the transaction fails to explain the objective of the transfer and how it assisted in achieving the objectives and purpose of the NR Tata Trust
The notice has given the recipients 15 days to “make good the loss”, failing which it has threatened civil and criminal proceedings.
There was no response to emails sent to all the trustees named in the notice, seeking a response to the allegations.
This notice comes just days ahead of a meeting of Tata Trusts on May 16, originally scheduled for last week but called off without a reason.
Last week also just prior to the meeting, petitioner Suresh Tulsiram Patilkhede, a 61-year old Thane resident, had sought to stop the meeting, alleging that Sir Ratan Tata Trust’s board composition was in violation of the Maharashtra Public Trust Act, 2025. The Bombay High Court however refused to stay the proceedings.