Mumbai: The battle over leadership at Tata Sons has intensified, with Tata Trusts challenging the September 17 reappointment of N Chandrasekaran as executive chairman for another five years. The Trusts argue that the resolution failed to meet requirements under Tata Sons’ Articles of Association (AoA).
Trust Nominees Split
Tata Sons board voted 4-1 in favour of Chandrasekaran’s reappointment. Noel Tata, chairman of Tata Trusts and one of its two nominee directors on the Tata Sons board, opposed the proposal, while Venu Srinivasan supported it.
According to the Trusts, the overall 4-1 vote does not settle the issue. It maintains that the AoA require affirmative support from a majority of Trust-nominated directors for such a decision.
With only two Trust nominees, the Trusts argues that both must support the resolution. Since Noel Tata voted against it, the required condition was not satisfied.
Casting Vote Questioned
The Trusts also rejected the argument that the split between its nominees created a deadlock that could be resolved through the chairman’s casting vote.
It said a casting vote applies only when votes are equally divided across the overall board and cannot be used to overcome the separate requirement governing Trust nominees.
On this basis, Tata Trusts maintains that the September 17 resolution was not validly passed and is void from the outset. Tata Sons, however, has proceeded on the basis that Chandrasekaran was validly reappointed.
Listing Battle Widens
The dispute comes alongside another major disagreement over the proposed listing of Tata Sons. The board has initiated steps towards complying with applicable RBI requirements, while Tata Trusts has opposed listing and favoured exploring alternatives.
The Trusts also pointed to the Cyrus Mistry litigation, saying Tata Sons had previously defended special rights available to Trust-nominated directors under its Articles.
The competing interpretations have now placed the validity of Chandrasekaran’s reappointment at the centre of the escalating governance dispute.
