Crucially, despite its claims of surrendering its tax-exempt registration in 2015, Tata Trusts has not paid taxes since. This has significantly weakened its standing in the matter.
In 2018, the Public Accounts Committee (PAC) of Indian Parliament stated that Tata Trusts spent its money in a way that not only violated the I-T Act but also the trust deed. This was because it donated money in areas that did not match with the objects of the trust. The PAC stated that the construction of the Tata Hall building—a 150,000 square-foot glass and brick building that houses residential space, classrooms, and common areas—at Harvard Business School (HBS) did not amount either to charity or international welfare. Instead, the $50 million ‘gift agreement’ with the Dean of HBS was for the promotion of personal interest of one/some of the trustees of various Tata trusts, the PAC argued.
Who is to be blamed?
Some former Tata Trusts’ employees blame Venkataramanan’s leadership for these issues. The former senior executive with Tata Trusts also said it was curious why Venkataramanan, who had been Ratan Tata’s executive assistant, became the managing trustee of Tata Trusts in the first place.
There were also a slew of instances where Venkataramanan came under scrutiny. It all started with the CBI summoning Venkataramanan in July 2018 as he was Tata Group’s nominee on the board of budget airline AirAsia India. He was accused of using illegal tactics to lobby for a change in policies. Later in December 2018, the I-T department also questioned the Rs 2.66 crore ($370,927) paid as salary to Venkataramanan by Dorabji Tata Trust for 2015-16.
Even Cyrus Mistry, the former chairperson of Tata Sons, who is fighting a legal battle against Ratan Tata over his sacking, has alleged that Tata Trusts inappropriately interfered and misgoverned Tata Sons when it was managed by Venkataramanan.
In February 2019, Venkataramanan was replaced as a trustee with Ratan Tata’s half brother, Noel. He has since joined a rival Indian conglomerate—Mukesh Ambani-helmed Reliance Industries.
Blame games
To lay the blame entirely at Venkataramanan’s feet, though, seems like a stretch. The issues with Tata Trusts begin well before he was placed in charge. For instance, in 2013, the Comptroller and Auditor General (CAG) of India noted that Jamsetji Tata Trust and Navbhai Ratan Tata Trust together earned about Rs 3,000 crore ($418.3 million) by accumulating income in 2009 and 2010. This money, CAG noted, was invested in ways that are not allowed for trusts with tax-exempt registration.
Despite all the trouble it finds itself in, however, Tata Trusts insists that it is committed to its current course. As one former senior executive with Tata Trusts said, Ratan Tata, the chairperson of the board of trustees, is committed to direct implementation over grant-making. Indeed, even in the statement it issued in November, where it argued it had voluntarily surrendered registration in 2015, Tata Trusts stated that it did not need tax exemptions to be charitable.
Despite this statement of intent, though, many agree that Venkataramanan’s departure has had an impact on Tata Trusts’ functioning. The change is not being easily accepted by everyone, said one of the senior executives who resigned from the organisation after Venkataraman and Harish Krishnaswamy, Tata Trusts’ former COO, resigned. Krishnaswamy left a week after Venkataramanan’s resignation. The senior executive said he is not clear if the board asked the two to leave, or if it was voluntary. But after they left, there was a lot of attrition in the senior management, he added.
Acting senior executives brought in from Tata Group tried, he said, to manage Tata Trusts. “But a lot of audits happened of the previous grantees and grants. A lot of emails coming to the employees. A lot of financial restrictions came, different levels of bureaucratic approval and the travel budget was restricted. The implications of the changes in leadership affected everyone,” he added.
The Tata Trusts board did not respond to The Ken’s request for an interview, nor did Venkataramanan. Questions sent to the board and Venkataramanan also went unanswered. All the interviews The Ken conducted with several people associated with Tata Trusts—which grew under the leadership of Venkataramanan from about 50 people in 2012 to 300 people in 2018—indicated he had a free hand in managing the charity.