N Chandrasekaran exit: Uncertainty looms over Tata AGM; here's what experts say

On Tuesday, August 18, Tata Sons, the holding company of India’s oldest and largest conglomerate, adjourned its annual general meeting due to a lack of quorum. It marked the first instance of this taking place in the company’s history.

This comes on the back of the inability of Sir Ratan Tata Trusts (SRTT), which holds a 23.56% stake in Tata Sons, to nominate its representative for the meeting. The issue relates to SRTT’s board composition and, more specifically, the proportion of permanent trustees. A valid quorum at the meeting mandatorily requires the attendance of at least five members and must include a representative jointly nominated by two trusts – Sir Dorabji Tata Trust (SDTT) and SRTT – that together hold a 52% stake in Tata Sons.

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Earlier this month, N Chandrasekaran, Chairman, Tata Sons, said he was not offering himself for a third term. He took charge in 2017 and is in the midst of his second five-year term. That was followed by a statement from SDTT saying that it had passed a resolution to initiate the setting up of a selection committee to recommend a person as the new Chairman. In line with Tata Sons’ Articles of Association, both SRTT and SDTT will jointly nominate three members to a five-member selection committee. One member each will come from Tata Sons and one external member. There is also the reappointment of Chandrasekaran as a Tata Sons Director that needs to be decided.

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Ashish Kumar Singh, Partner at Capstone, says putting the search committee together is critical. “Time is of the essence here and going by the rules, the annual general meeting for the 2026 fiscal must be held no more than 15 months after the last meeting,” he points out. Given that the last one was held on August 14, the deadline is mid-November this year. “The option to get special permission from the Ministry of Company Affairs can be exercised. More than anything else, the interest of minority shareholders must be protected,” adds Singh.

Those tracking the development maintain the uncertainty surrounding the development is worrying. “There must be a resolution to end this. Sir Ratan Tata Trust can reach out to the Bombay High Court to intervene and suggest remedial measures. That will at least act as an interim relief,” says Shiju P V, Managing Partner at India Law LLP.

Meanwhile, two former Tata Sons Directors, R Gopalakrishnan and Ishaat Hussain, in a newspaper column, maintained that differences at the top level should not affect the Tata institution negatively. “Tata is a rare national jewel. It is a business group that most Indians respect and love. Let us, therefore, wish Tata all the best in finding a successor and returning the enterprise to its mission of creating employment, family advancement, and national prosperity,” they said.