Tata Sons rejects Noel Tata objections over N. Chandrasekaran reappointment

Tata Sons has rejected objections raised by Tata Trusts Chairman Noel Tata over the reappointment of N Chandrasekaran as executive chairman, saying its board had approved the decision by a majority and that the resolution was valid under the company’s Articles of Association (AoA), according to The Economic Times.

In a September 24 letter to Noel Tata, Tata Sons maintained that the board had followed the applicable legal and governance procedures while approving Chandrasekaran’s fresh five-year term. The company said it had relied on legal advice in arriving at its interpretation of the AoA and defended the validity of the September 17 resolution.

Dispute over Article 118

A key point of disagreement is Article 118 of the Tata Sons AoA, which provides a special mechanism for appointing a new chairman when Tata Trusts collectively hold at least 40% of the company’s paid-up ordinary share capital. The provision involves a selection committee comprising representatives of the Sir Dorabji Tata Trust (SDTT) and Sir Ratan Tata Trust (SRTT), along with other members specified under the article.

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Tata Sons, however, argued that this provision applies to the first appointment of a new chairman and not the reappointment of an incumbent chairman. It therefore rejected Noel Tata’s contention that the selection committee process should have been initiated for Chandrasekaran’s continuation.

The company also said the relevant procedure had neither been followed nor referred to in the notice for the extraordinary general meeting. Tata Sons said its legal position was supported by senior advocate Sudipto Sarkar. Following Noel Tata’s objections, it also sought opinions from former Chief Justice of India Uday Lalit and former Supreme Court Judge BN Srikrishna. According to the company, both legal opinions supported the same interpretation and confirmed the validity of the board resolution.

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Tata Sons rejects link to failed AGM

The letter also addressed the Tata Sons annual general meeting held on August 18, which was adjourned after the required quorum was not available. Tata Sons said the meeting could not proceed because Tata Trusts were unable to nominate a joint authorised representative as required under Article 86 of the AoA.

The company rejected any suggestion that the September 17 board decision to reappoint Chandrasekaran was connected to the failed AGM, describing such a link as untenable.

Chandrasekaran’s continuation remains separate issue

Tata Sons also clarified that Chandrasekaran’s continuation as a director would be considered separately at a general meeting under Section 152 of the Companies Act, 2013. The company said shareholders would take up the question of his continuation as a director through the prescribed process.

The latest exchange follows Noel Tata’s objection that Chandrasekaran had already communicated on August 12 that he would not seek another term and that Tata Trusts had accepted that decision and requested a selection process for his successor. Noel Tata had also argued that deciding the chairmanship before resolving Chandrasekaran’s status as a director was premature.

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What Noel Tata said

Last week, Noel Tata said N Chandrasekaran’s August 12 decision not to seek another term as Tata Sons chairman was his own, freely taken and clearly communicated. He said Tata Trusts, which holds around 66% of Tata Sons’ equity, had accepted the decision and had asked the company to constitute a selection committee to appoint a successor. According to Noel Tata, the subsequent move to reappoint Chandrasekaran would set aside his stated decision, the Trusts’ acceptance and the succession process already initiated.

He also argued that the reappointment was premature because Chandrasekaran’s position as a director remained unresolved, potentially exposing the company to legal challenges. Noel Tata further said the company’s regulatory matters and leadership succession should be treated as separate issues and decided independently. He concluded that, for Tata Trusts, Chandrasekaran’s decision had been accepted and had “attained finality”, adding that it was time to move on.

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