Tata Trusts calls N Chandrasekaran's reappointment legally invalid

Tata Trusts has said the resolution reappointing N Chandrasekaran as Tata Sons chairman is legally invalid because it did not receive the mandatory support of both Trust-nominated directors.

It argued that the 4:1 overall vote was irrelevant since one of its two nominees opposed the proposal, leaving a separate condition under the company’s Articles of Association unmet.

Tata Trusts owns approximately 66 per cent of Tata Sons and has two nominee directors on its Board. According to the Trusts, a majority between the two means both must support the resolution.

The Trusts also rejected claims that the vote had created a Board deadlock, saying the chairman’s casting vote could not override this requirement. It declared the resolution “void ab initio”, meaning invalid from the outset.

The statement came after the Tata Sons Board voted 4:1 on September 17 in favour of Chandrasekaran continuing as chairman of the group holding company.

Noel Tata, chairman of Tata Trusts and a director of Tata Sons, voted against the resolution and challenged its validity.'4:1 VOTE IS IRRELEVANT'

At the centre of the dispute are the Articles of Association, which contain the rules governing Tata Sons.

According to Tata Trusts, Board decisions cannot be settled solely by counting the total votes. They also require the affirmative support of a majority of the directors nominated by the Trusts.

“The Articles of Association of Tata Sons do not leave any decision of the Board to a mere head count of Directors,” the statement said.

Since one of the two Trust nominees opposed Chandrasekaran’s reappointment, the proposal failed to receive the required approval, it argued.

The Trusts maintained that this requirement was separate from the overall Board vote. Therefore, the 4:1 result did not make the resolution valid.

“A condition is either met, or it is not. In this case the condition was not met,” it said.‘THERE WAS NO DEADLOCK’

Tata Trusts also disputed the suggestion that its refusal to support the resolution had created a deadlock which could paralyse the company and justify the use of a casting vote.

It said the Board had considered the proposal and arrived at a clear result. The resolution failed because it did not fulfil one of the conditions laid down in the company’s rules.

“There was no paralysis and there was no deadlock. The Board put a question, and the AoA answered it in the negative,” the statement said.

“The exercise of a protective right conferred by a company’s own constitution is not a deadlock; it is that constitution working as it was written to work.”

The Trusts said the chairman’s casting vote could be used only when there was an equality of votes at the overall Board level. It could not be used to provide the separate majority required among the Trust-nominated directors.

Based on this interpretation, Tata Trusts said Chandrasekaran had not been legally reappointed.SUCCESSION QUESTION REOPENS

The dispute has reopened a succession issue that appeared to have been settled after Chandrasekaran decided in August not to seek another term when his current tenure ends in February 2027.

The Sir Dorabji Tata Trust, one of the two principal Tata Trusts, had respected his decision and begun the process of forming a selection committee to recommend the next Tata Sons chairman.

The September 17 vote marked a reversal, with the Tata Sons Board backing Chandrasekaran’s continuation despite opposition from Noel Tata.

Attention will now turn to the company’s adjourned Annual General Meeting, which must be held by December 31.

Chandrasekaran is due to retire by rotation as a director of Tata Sons. His reappointment to the Board will require shareholder approval, making the position of Tata Trusts crucial when the matter comes up for a vote.AGM FACES ANOTHER COMPLICATION

The two principal trusts, the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, together hold a majority stake in Tata Sons.

However, the Sir Ratan Tata Trust is currently restrained from convening trustee meetings following proceedings before the Maharashtra Charity Commissioner. The restriction has already affected decisions linked to Tata Sons.

The Tata Sons AGM, originally scheduled for August 18, was adjourned after the two trusts could not jointly nominate the representative required for the meeting.

Unless the issue is resolved before the AGM is reconvened, it could again complicate the Trusts’ ability to take a common position on Chandrasekaran’s reappointment as a director.- EndsPublished By: Aprameya RaoPublished On: Sep 20, 2026 22:30 IST