The Monk In The Midst Of War
Tata Trusts Managing Trustee R Venkataramanan opens up about the battle he’d rather not fight.
"We have followed every single law in this country" says Ramachandran Venkataramanan hitting back at allegations of governance lapses at Tata Trusts. The managing trustee of Tata Trusts, which owns two thirds of Tata Sons, would rather focus on philanthropic work than be dragged into this legal mess with Cyrus Mistry. But he's dug his heels in to protect what matters most to him - his mentor, Ratan Tata's name.
The Tata group already has hired a bevy of senior lawyers led by Mohan Parasaran, Harish Salve and P Chidambaram to respond to Mistry's petition filed at the National Company Law Tribunal. Clad in a sky blue buttoned down shirt that reveals his sacred thread, Venkat, as he is called, spews Sanskrit verses with ease to explain a battle that he'd rather not fight. Edited excerpts.
Cyrus Mistry in an interview to Bloomberg spoke about the need for corporate governance in Tata Trusts and Tata Sons. Given these allegations would you be reviewing your governance structure within the trust and your relationship with Tata Sons?
The Tata trusts have been in existence for over a hundred years. There was always symbiotic nature on how the trusts worked with each other and with the Tata entity. We have always complied with every single law and regulation that exists in the country. Historically and even now, we have not violated any single law. All our accounts and our annual reports are in the public domain. It is there for anyone to see. It is not the private personal property of Mr Ratan Tata or me.
Executives get a salary, but none of the Trustees even get a salary. We meet four to six times a year and review our budgets and programmes. Nobody is remotely doing this for personal benefit. If you ask why the Trust is interested in Tata Sons? Trustees are concerned about what happens in the parent company. Whatever they are doing is exercising their right as a shareholder. They are not concerned with the operations or management of any enterprise.
Would you say maximising your dividend payout is your core objective?
Let me flip that question the other way. That is our asset. Protection of our asset includes, among other things, maximising returns by virtue of dividends. If that asset depreciates for whatever reason, the same media and everyone else will say the trustees did not do their job. They were sleeping, they didn’t protect the asset and we lost value. Someone will file a suit. So it’s damned if you do, damned if you don’t. Whatever the trustees did or considered, we believe it’s part of our fiduciary responsibility to protect that asset.
Cyrus Mistry has repeatedly alleged that Tata Capital bent its rules to give a loan to C Sivasankaran, which subsequently went bad. In a letter dated October 25, Cyrus Mistry said, and I quote “Loan to Sivasankaran was given under strong advice of Executive Trustee Venkataramanan, which has since turned NPA.” Did you advise the loan to be given?
Completely untrue. There is absolutely no truth in saying that the loan was given on the basis of somebody’s advice leave alone me. Tata Capital is an independent company and has its own governing board. We have enough evidence to prove this to you. That’s all I have to say.
Mistry has also alleged a forensic report containing details of fraud and wrongdoing at Air Asia India for discussion at October 24 board meeting. This is a serious allegation. Can you give us your view on this matter?
Internal auditors noticed certain irregularities in the accounts of AirAsia. The board of AirAsia commissioned a forensic report and not Cyrus Mistry. Deloitte did a forensic study and it threw several instances of irregularities. The AirAsia board in a meeting in September considered all these items and evaluated if these were material in nature or not. I was present at that meeting. In that meeting, a number of questions were raised including whether these transactions that were reported. After discussions, they adopted the accounts and authorised to take whatever action necessary to take this matter to its logical conclusion. There is absolutely no question of hushing up anything even remotely. AirAsia has detailed statement on this.
You are in the middle of an acrimonious battle with a shareholder who owns 18 percent. The Tata Trust is the principal shareholder. Have the trusts considered increasing stake in Tata Sons from the current 66 percent to ring-fence?
The trusts have no interest in hiking stake. Forget the interest, by law, we can’t hike stake. In fact, the trusts were first 85 percent, we got diluted to 66 percent. Trusts are not in the investing business at all. The shares we have are the properties that have been bequeathed to us by the founder and his children. It is not as if we have gone and acquired stake in 20 different companies. It’s neither our interest nor desire. Our desire is to continue our charity work with a view to make a difference for a better tomorrow.
Do you see the relationship with Tata Group changing at the board level? Will people from Tata Trusts sit on the boards of group companies?
That’s a call I cannot take. What one needs to consider is for a hundred years, this institution has worked on the basis of trust, respect and confidence. Given what one has seen in the past 8-10 weeks, we need to put in a legal framework, for the lack of a better word, to ensure we are complying not just the spirit of law but the letter of law as well. We do need to take several learnings from this experience.
You work very closely with Ratan Tata. This has been a tumultuous time, how has he felt about what’s going on?
He is very sad. Quite frankly, he doesn’t need this at this age or stage in life. Today as part of the NCLT petition, some people have accused him off siphoning off Rs 3 crore. I mean really!? He doesn’t need this. Ratan Tata has given his entire life for the group. He has built enormous goodwill across the world over the years. But he is a fighter…he is not known to give up anything. He is not doing all of this for personal wealth or glory. He is doing this to protect the institution and the family name. When people question the edifice of an institution, it does hurt. It hurts all of us.
