Lagatar24 Desk
Mumbai: Tata Trusts has said the Tata Sons board’s decision to hand N Chandrasekaran a fresh five-year term as executive chairman is “illegal,” setting up a fresh round of tension at the top of the Tata Group just weeks after Chandrasekaran had reportedly indicated he did not wish to continue.
A Board Split Down the Middle
Tata Sons approved Chandrasekaran’s reappointment at a board meeting, but Tata Trusts chairman Noel Tata voted against the resolution, which was still passed by a majority of the board. In a statement issued after the meeting, Tata Trusts said the resolution amounted to a “legal nullity” under the Articles of Association of Tata Sons, arguing that appointing or reappointing a chairman requires a majority of the Trusts’ nominee directors to vote in favour, and that a valid meeting on the matter cannot even be held unless both Trust nominee directors are present and voting in support. Since Noel Tata, one of the two nominee directors, voted against the move, Tata Trusts contends the resolution has no legal basis.
Noel Tata Cites Chandrasekaran’s Own Decision
In a separate statement, Noel Tata said reappointing Chandrasekaran now would require the board to set aside three things at once: Chandrasekaran’s own stated decision to step down, the majority shareholder’s acceptance of that decision, and the succession process the shareholder had already asked the company to begin. Tata Trusts also said Noel Tata had submitted a legal opinion from former Chief Justice of India Justice Dr DY Chandrachud backing its position, but that the board did not take note of it during the meeting.
