As the Ratan Tata Endowment Foundation and Trust are new entities, the continuous CSR fund flows from Tata Sons will help it undertake new projects.
The Tata Group is giving finishing touches to a plan to direct the entire corporate social responsibility (CSR) fund of the group holding company, Tata Sons, to the Ratan Tata Endowment Trust and the Ratan Tata Endowment Foundation, which will use the money to support social sector projects.
Both the entities were set up to undertake social sector projects funded by investments made by the late Tata Group chairman Ratan Tata, who died in October last year.
Tata's investments in various startups and 0.84 per cent (approx) stake in Tata Sons are worth ₹10,000 crore (Rs 100 billion), according to estimates. These investments will be housed under Ratan Tata Education Foundation, says his will.
According to sources, Tata Group Chairman N Chandrasekaran would be inducted to the board of the Ratan Tata Endowment Foundation and Trust as managing trustee along with the late Ratan Tata's half siblings -- Noel Tata, Deanne Jeejeebhoy and Shireen Jeejeebhoy.
Noel Tata took over as chairman of all Tata Trusts a day after Ratan Tata's death. The Tata Trusts articles bar the same person from holding the chairman of Trusts as well as Tata Sons chairman positions.
The plan is in the final stages with discussions centred around how to take social sector projects forward in line with other Tata Trusts.
At present, the Tata Trusts, which owns 66 per cent stake in Tata Sons, funds projects with the dividend income from Tata Sons.
As the Ratan Tata Endowment Foundation and Trust are new entities, the continuous CSR fund flows from Tata Sons will help it undertake new projects.
Tata Trusts is expected to get a bumper dividend this year as Tata Sons, the unlisted holding company, received a substantial dividend of ₹24,931 crore (Rs 249.31 billion) in the first nine months of this financial year from Tata Consultancy Services, India's largest software exporter.
TCS had declared a special dividend of ₹66 per share, in addition to a ₹10 per share interim dividend for the December quarter. Earlier, it had declared ₹10 a share interim dividend each in the first two quarters.
The dividend from Tata Sons to its shareholders will be announced after the financial year ends in March.
If the profits are higher in FY25, then 2 per cent of the profits will be earmarked for CSR projects.
Meanwhile, the executors of Ratan Tata's will are expected to move the Bombay high court next week to probate his will.
According to the will, Tata has left almost one-third of his estate to his long-time friend and confidant Mohini Mohan Dutta while the rest has been bequeathed to his half sisters.
The executors of the will are in talks with former Chief Justice of India Sharad Arvind Bobde as an arbitrator to avoid any dispute.
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