You are the inheritors of Tata Trusts, Ratan Tata says in letter to group employees
Months after questions were raised on the governance structure and ambit of power of the Tata Trusts by former group chairman Cyrus Mistry, leading to one of the most bitter boardroom battles ever, Ratan Tata today called group employees as the inheritors and custodians of the Tata Trusts.
The Economic Times today reported that Tata Trusts chairman Ratan Tata, in a letter to employees of the Tata group, said that they were the "inheritors and custodians of the (Tata) Trusts" and of its "belief in making a sustainable change" in society.
The Tata Trusts own two-thirds of Tata Group's stocks.
"You bring your zeal, your vigour, your integrity and most importantly your hard work. It is because of you that we can derive and obtain the opportunity and the privilege to serve our community and through that, our nation," the letter addressing employees on the 178th birth anniversary of Tata Trusts Founder Jamsetji Nusserwanji Tata, said.
The journey of Tata Trusts began in 1892 in the form of the JN Tata Endowment. This was followed by Sir Ratan Tata trust in 1919, Sir Dorabji Tata Trust in 1932, the JRD Tata Trust in 1944, the Navajbai Ratan Tata Trust Jamsetji Tata Trust in 1974 and the Tata Education and Development Trust in 2008.
The Tata Trusts work across health, energy, rural upliftment, urban poverty alleviation and education, with their work spreading over 17 states and 170 districts across India and the programmes that the Tata Trusts support reach out to millions of households through a network of over 450 partner organisations.
Yet, the internal functioning of the Tata Trusts has been a mystery.
In November last year, the Income Tax department had summoned top officials of the Tata Trusts to explain the misuse of tax exemption granted to the trusts for charitable purposes.
The I-T department’s action was a follow up to a 2013 Comptroller and Auditor General’s (CAG) report that said the Trusts were earning a huge profit, instead of using it for charitable purposes.
The CAG report pointed out that the trusts were making huge profit by spending less on charitable purposes and accumulating it as surplus. The surplus funds were then used for creating fixed assets for earning more profit, or were transferred to other trusts rather than being used for charitable purposes.
This, the report claimed, was done to avoid paying any tax. The CAG audit pointed out the 22 trusts under scrutiny, including others, have accumulated surpluses of Rs 819 crore. The trusts get income tax exemption only if they spend money on charitable purposes and not for making profits.