Tata Trusts row: A new Maharashtra govt rule may throw a spanner in the works for the board

A recent Maharashtra government rule capping the number of lifetime trustees is expected to have direct implications for Tata Trusts and other major public charitable trusts. According to a report in The Economic Times, the Maharashtra Public Trusts (Amendment) Ordinance, 2025, notified in September, restricts perpetual trustees to one-fourth of a trust’s total board strength. This challenges a resolution passed by Tata Trusts in October 2024, which stated that all current trustees would have their terms renewed for life after their existing tenures ended.

The new ordinance introduces a significant shift in governance structures for trusts holding substantial assets and influence, requiring a careful reconsideration of board composition policies.

As per the report, the ordinance creates two classes of trustees — perpetual or lifetime trustees and tenure-term trustees. The main Tata trusts, Sir Ratan Tata Trust (SRTT) and Sir Dorabji Tata Trust (SDTT), currently have six trustees each, following the non-renewal of Mehli Mistry’s term. Under the new rule, only one-fourth of board members can be perpetual trustees, meaning a maximum of one or two lifetime appointments per board at current composition. This is expected to impede Tata Trusts’ recent policy to appoint trustees for life upon their reappointment.

The ordinance also establishes new procedures for appointing and reappointing tenure-based trustees. Where the founding trust deed does not specify a tenure, “existing trustees may appoint replacements for terms of up to five years at a time”, the report stated. In practice, trusts must now select carefully who will receive lifetime appointments, as exceeding the one-fourth cap is not permitted under the new law.

A key concern for Tata Trusts is the reappointment of Venu Srinivasan. He was made a perpetual trustee of SDTT on October 20, before the new rules were brought to the attention of the board. Sources told the financial daily, “The trustees, sources said, were not aware of the new ordinance when the reappointment happened.” This has created uncertainty regarding the validity of recent board appointments and the status of trustees appointed for life in the interim period.

Noel Tata’s own renewal for life as chairman of Tata Trusts and SDTT occurred in January, prior to the ordinance coming into force. During his appointment as chairman, the resolution for lifetime reappointments was also passed. The SDTT board now comprises Noel Tata, Venu Srinivasan, Vijay Singh, Pramit Jhaveri, and Darius Khambata.

With Tata Trusts (including SDTT and SRTT) holding about 51 per cent of Tata Sons, the holding company of the Tata Group, these changes are set to impact the governance structure of entities controlling significant corporate assets.