'Invalid': Tata Trusts rejects board's reappointment of N Chandrasekaran
What's the story
Tata Trusts has challenged the reappointment of N Chandrasekaran as the Chairman of Tata Sons. The Trusts claim that the board resolution did not comply with a requirement under the company's Articles of Association (AoA) and cannot be revived through a casting vote by the chairman. The AoA mandates that a majority of the directors nominated by Tata Trusts, which owns around 66% of Tata Sons, must support any decision.
Dispute
Resolution in question not validly passed
The Tata Trusts have argued that the resolution in question was not validly passed and has no legal effect.
They emphasized that the "Articles of Association (AoA) of Tata Sons do not leave any decision of the Board to a mere head count of Directors."
The Trusts also maintained that the Chairman's casting vote is only applicable where there is an equality of votes at the overall board level, not among Tata Trusts's Nominee Directors.
Clarification
No deadlock, no paralysis at company: Tata Trusts
The Tata Trusts clarified that "majority amongst two is two and not one."
They said, "On September 17, 2026, one such Director voted against the resolution. Thus, the affirmative support of Tata Trusts Nominee Directors as mandated by the AoA was not given."
The Trusts also rejected claims of a deadlock and stated that there was no paralysis at the company.
Rights defense
Sanctity of Articles of Association
The Tata Trusts also defended their rights under the AoA, which Tata Sons had defended before the Supreme Court in the case of Cyrus Mistry's removal.
They said, "Articles of Association are not a convenience to be relied upon when they help and ignored when they don't."
The Trusts further argued that Tata Sons cannot now reject these rights after defending them in court.
Governance concerns
Disappointment over current chairman's argument for reappointment
The Tata Trusts expressed disappointment over the current chairman's argument for reappointment.
They said, "It is unfortunate that the Chairman of Tata Sons, a Company renowned for setting high standards of corporate governance, is contending reappointment on such an untenable interpretation of the Articles."
The Trusts also rejected claims that a listing would necessarily improve corporate governance at Tata Sons.