Tatas open their vault, commit Rs 1,500 crore to fight coronavirus

Tata Trusts, the philanthropic arm of the Tata group, and Tata Sons, the group's holding company, on Saturday committed Rs 1,500 crore to fight the Covid-19 crisis.

“The current situation in India and across the world is of grave concern and needs immediate action. Tata Trusts and the Tata group’s companies have in the past risen to the needs of the nation. At this moment, the need of the hour is greater than any other time,” Ratan Tata, chairman of Tata Trusts, said in a statement. “Today, Tata Trusts continue their pledge to protect and empower all affected communities, and is committing Rs 500 crore,” he added.

Tata said urgent emergency resources were needed to be deployed to cope with the one of the “toughest challenges the human race will face”.

In a separate statement, Tata Sons Chairman N Chandrasekaran said the company had earmarked Rs 1,000 crore to battle Covid-19 and for related activities. “We will work together with Tata Trusts and our chairman emeritus, Ratan Tata. We will work in a collaborative manner to bring the full expertise of the group,” he said.

Tata Sons is also bringing in ventilators and is gearing up to manufacture the same in India soon. “All of us will have to do whatever it takes to alleviate and enhance the quality of lives of the communities we serve,” he said.

The donation by Tata Sons and Trusts is the biggest sum committed by a corporate and its philanthropic arm since the outbreak of Covid-19. Others, including Reliance Foundation, Mahindra Group, Bajaj Group, and ITC, are lending support too in the battle against the pandemic.

The amount committed by Tata Trusts will be deployed for purchasing personal protective equipment for the medical personnel on the frontlines and procuring respiratory systems and testing kits to increase per capita testing. It will also be utilised for setting up modular treatment facilities for infected patients. Knowledge management and training of health workers and the general public will be other focus areas.

Tatas Trusts pledge Rs 500 crore for fight against coronavirus in India

Tata Trusts on Saturday pledged Rs 500 crore for prevention and relief activities of the coronavirus pandemic.

The philanthropic organisation, which hold 66 per cent in the holding firm of the Tata Group, Tata Sons, said the fund has been earmarked for personal protective equipment for medical personnel on the front lines, respiratory systems for treating increasing cases and testing kits to increase per capita testing.

Besides, it would also be used for setting up modular treatment facilities for infected patients, knowledge management and training of health workers and the general public, Tata Trusts said in a statement.

Commenting on the initiative, Tata Trusts Chairman Ratan Tata said, "The current situation in India and across the world is of grave concern and needs immediate action...At this moment, the need of the hour is greater than any other time.

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"In this exceptionally difficult period, I believe that urgent emergency resources need to be deployed to cope with the needs of fighting the COVID 19 crisis, which is one of the toughest challenges the human race will face."

Tata Trusts and the Tata group's companies have in the past risen to the needs of the nation, he added.

Tata Trusts, Tata Sons and the Tata group companies are joined by committed local and global partners as well as the government to fight this crisis on a united public health collaboration platform, which will strive to reach out to sections that are underprivileged and deprived, he added.

"We are deeply grateful and have immense respect for every person of member organizations who have risked their life and safety to fight this pandemic," Tata said.

Srinath Narasimhan named as Tata Trusts' CEO, to take charge on April 1

Tata Trusts on Wednesday said its trustees have decided to appoint Srinath Narasimhan as the chief executive of the Trusts with effect from April 1, 2020.

Currently, Narasimhan is the managing director of Tata Teleservices Ltd and Tata Teleservices (Maharashtra) Ltd, Tata Trusts said in a statement.

Having joined the Tata Administrative Services (TAS) in 1986, Narasimhan has held various assignments in the Tata group, including as the managing director of Tata Communications Ltd, it added.

The trustees also appointed Pramit Jhaveri, former chief executive officer of Citi India and former vice chairman of banking, capital markets and advisory for Asia Pacific, as a Trustee of the Sir Dorabji Tata Trust.

His appointment is effective from February 12, 2020, it added.

Tata Trusts hold 66 per cent of the equity share capital of Tata Sons, the principal investment holding company and promoter of Tata companies.

Started in 1892, Tata Trusts support education, health, livelihood generation, and art and culture through its various philanthropic initiatives.

Srinath, Tata Teleservices MD, emerges frontrunner for Tata Trusts CEO post

At a time when Tata Trusts is caught in a legal tangle over the cancellation of registration of six trusts, it’s set to get a chief executive officer (CEO). After a search process stretching over more than eight months, an old-timer from the group, N Srinath, managing director, Tata Teleservices, has emerged a frontrunner for the CEO’s post, according to sources in the know.

Tata Trusts does not have any comment to make, a spokesperson told Business Standard on the matter.

In February, R Venkataramanan (popularly known as Venkat) had stepped down as managing trustee of Tata Trusts, which owns 66 per cent in the salt-to-software group’s holding company Tata Sons. The new CEO, likely to be appointed soon, would possibly have similar powers as Venkat, but he won’t be designated managing trustee.

A search committee, headed by the group’s chairman emeritus Ratan Tata, has over the last many months interviewed several internal employees as well as professionals from elsewhere to select a CEO. A final call on the selection of the CEO is expected to be taken by the committee before the year ends.

Venkat’s resignation followed the Income-Tax Department’s scrutiny of his annual salary of Rs 2.66 crore, and the subsequent withdrawal of tax exemption given to Sir Dorabji Tata Trust, which is the largest among the clutch of trusts under Tata Trusts.

After Venkat’s resignation, operations of Tata Trusts have been managed by Chairman Ratan Tata along with a core group of officials. Among other recent changes in the organisation, Noel Tata, Ratan Tata’s half-brother, was appointed a trustee of the Sir Ratan Tata Trust, which is the second biggest trust in the Tata Trusts fold.

Tata Trusts, which played a critical role when Cyrus Mistry was removed as Tata Sons chairman in 2016, is again at the centre of a controversy. On October 31, the I-T Department cancelled the registration of six trusts (not the bigger ones) operating under Tata Trusts, citing violation of norms applicable to charitable institutions — a move that could result in a tax liability of about Rs 12,000 crore.

The Tatas are challenging the date of the order, which makes the group liable to pay a much higher amount of tax under the new tax provision introduced in June 2016 concerning charitable trusts. The Trusts is of the view that the cancellation should apply retrospectively as it had offered to surrender the registration in 2015, about one year before the new tax provision became effective.

Tata Trusts was established in 1919, but the activities took off in a big way when Sir Dorabji Tata set up a trust in 1932.

Over the years, the significance of the Trusts has grown in terms of its commercial interest in the Tata Group and the power it holds, even as charity remains its core area, according to an official associated with it.

Rs 12,000-cr tax blow: I-T dept cancels registration of 6 Tata Trusts

The Income-Tax Department has cancelled the registration of six trusts operating under Tata Trusts, a move that could result in tax liability of about Rs 12,000 crore for the organisation. The cancellation order was on account of activities (performed by trusts) that are not commensurate with Articles of Association, according to an official.

The concerned entities are the Jamsetji Tata Trust, RD Tata Trust, Tata Education Trust, Tata Social Welfare Trust, Sarvajanik Seva Trust, and Navajbai Ratan Tata Trust. While these are not the main shareholding trusts, they hold 39,000 shares in Tata Sons, the parent company of the group, a person in the know said. Sir Dorabji Tata Trusts and Sir Ratan Tata Trust are the main entities of Tata Trusts.

Tata Trusts is the largest shareholder of Tata Sons, with 66 per cent stake.

The amount that the I-T Department wants Tata Trusts to pay is based on the accumulation of income of the last three assessment years 2015-16, 2016-17 and 2017-18, said two officials privy to the development.

In the 34-page order dated October 31, the tax department has invoked Section 115 (TD) of the I-T Act, a special provision introduced in 2016 with respect to certain category of trusts.

Rs 12,000-cr tax blow: I-T dept cancels registration of 6 Tata Trusts

Under this, a trust whose registration is cancelled is required to pay tax on its “accreted” (past exempted income).

The section deals with additional income tax if the trust converts or merges into a non-charitable trust, or if gets dissolved and fails to transfer its assets/liabilities.

The order says that the registration of the six trusts has been cancelled with immediate effect, which makes the trust liable to pay additional tax on the accreted income. If this had been from the date of the surrender being offered, which was in 2015, the tax would have been levied only on earnings. According to the order, these entities will be taxed at the maximum rate of 42 per cent.

In an e-mail response to Business Standard, a Tata Trust spokesperson said: “The Trusts are examining the order and will take necessary next steps in accordance with the law. The Trusts have effective legal options to vindicate their grievances against today’s order, both factually and legally.’’

The Trusts further clarified that this order of cancellation is a culmination of the decision taken by these six Trusts in 2015 to surrender, of their own volition, their registration under the Income Tax Act and to not claim the associated I-T exemptions.

‘’The decision to surrender the registration (an option available in law) was taken in the best interests of the Trust, and to maximise the resources available to the Trust for their charitable work, which is the principal object and focus of the Trusts.’’ The statement said: ‘’While the Tax Departm­ent’s order has cancelled the Trusts’ registration with immediate effect, we believe that as a matter of law and consistent with the Department’s own decision in the past, the cancellation should take effect from 2015, when the registrations were surrendered and the Trusts themselves consented to cancellation.’’

The assessment wing of the I-T department, Mumbai, had in July issued notices to these trusts, seeking explanation over surrendering the registration and also the accumulated income. People in the know said these trusts, after giving up the status of a charitable trust, have been paying taxes as non-charitable organisations.

The action by the I-T department was a follow up to the Co­m­ptroller and Auditor Genera­l’s (CAG) report of 2013, which said that the Trusts were earning huge profits, instead of performing activities for charitable purposes. The surplus funds were either used for creating fixed assets for earning more profit, or were transferred to other trusts rather than being used for charitable purposes, the CAG had said. This, the report claimed, was done to evade taxes. Following strong remarks by the audit body, the matter was shifted to the assessment wing of the tax department in 2018, which reopened the tax assessment of these trusts.