R Venkataramanan, the managing trustee of Tata Trusts, a string of non-profit organisations which owns 66% stake in Tata Sons, resigned on Wednesday. In another significant development, Ratan Tata’s half-brother Noel Tata has been appointed as a trustee of the Sir Ratan Tata Trust, the second largest among the dozen-odd charities that make up Tata Trusts.
As is known, Venkataramanan’s Rs 2.66-crore annual compensation has been under the income tax scanner and led it to withdraw tax exemption to the Sir Dorabji Tata Trust, the largest of all Tata trusts, in December 2018. The Trusts has contested the demand raised by the I-T department.
Venkataramanan is also under the scanner in a bribery and lobbying case to change government policy involving AirAsia India which is being probed by the CBI. Venkataramanan served as the nominee of Tata Sons on the board of the AirAsia India, a joint venture between Malaysia-headquartered AirAsia and Tata Sons.
Tata Trusts had backed Venkataramanan at that time and had reaffirmed its complete trust and support for him.
A statement issued by Tata Trusts on Wednesday said, “R Venkataramanan had informed the chairman and the trustees of Tata Trusts that he had been considering other options, given that he was completing five years as the Trusts’ executive trustee/managing trustee, and sought to be relieved. At the meeting of the trustees of Tata Trusts held on Wednesday, the trustees regretfully accepted his request”.
Venkataramanan will relinquish responsibilities as the managing trustee/ trustee of the Tata Trusts on March 31, 2019, it added.
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The Trusts have also established a committee of trustees with immediate effect to oversee the operations and to select a chief executive for the Trusts. It comprises Ratan N Tata, chairman of the Trusts, Vijay Singh and Venu Srinivasan, vice-chairmen of the Trusts. The Trusts had created the post of vice-chairman for the first time in December 2018.
Last year the income tax department and Tata Trusts had locked horns in the Bombay High Court over show-cause notices issued by the tax authorities as they sought to cancel the Tata Trusts licence under Section 12(A) of I-T Act for tax exemption.
The notices had alleged “non-compliance” of rules governing the use of the funds of the Trust for the purpose of tax exemptions. Under Section 12A the trusts and non-profit organisations can claim tax benefits, however such exemptions can be withdrawn if trusts invest in ‘prohibited modes’.
However, the Bombay High Court had granted stay on these notices after Tata Trusts filed a writ petition in the court regarding the same in April 2018. In October 2018, Tata Trusts withdrew the writ petition that it had filed. FE had reported that Tata Trusts have withdrawn the writ petition and said, “Judges have kept all contentions open and liberty to approach appropriate forum”.
“The trustees placed on record the significant contribution of Venkataramanan in steering and executing the objectives of the Trusts’ portfolios over the last five years. In addition to interventions through grants, the Trusts now also pursue large scale programmes through direct implementation and partnerships with multiple state governments and foundations,” the Wednesday’s statement added.
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Source: Financial Express