Noel Tata raises ‘strong objection’ to Tata Sons conduct, calls Chandra vote ‘null and void’

Tata Trusts chairman Noel Tata has challenged the validity of the September 17 Tata Sons board meeting, saying the voting on N Chandrasekaran’s reappointment and other resolutions was subject to conditions that were subsequently breached.

In a strongly worded letter Friday morning addressed to Tata Sons company secretary Suprakash Mukhopadhyay and marked to all directors, Tata said the resolution on the chairman’s reappointment was “null and void ab initio” and demanded that the company issue a public correction on what transpired at the meeting.

Also Read: 'The page has turned': Noel Tata opposes N Chandrasekaran’s reappointment as Tata Sons chair


The letter comes amid a public battle over Chandra’s reappointment after Tata Sons board voted for his return by a 4-1 majority.

“I write in my capacity as the chairman of Tata Trusts and a nominee director on the board of Tata Sons to place on record my serious disappointment and indeed my strong objection at the conduct of the meeting of the company today,” Tata wrote in the letter, the contents of which were described to an ET reporter.

“I record that I maintain that the vote taken on the captioned matter (reappointment of the chairman) and any resolution claimed to have been passed is null and void ab initio and of no legal relevance, efficacy or effect whatsoever.”

Tata’s contention is that the voting on Chandrasekaran’s reappointment, as well as on proceeding with arrangements for an IPO, was conducted subject to three pre-conditions, all of which he says were violated by the public statement issued by Tata Sons shortly after the board meeting announcing the outcome.

One of the conditions, Tata said, was that the company secretary would study the issue, obtain the relevant legal opinion and advise the board on the disagreement over which clause of the company’s Articles of Association would apply—121 or 118.

The second condition was that Chandrasekaran’s reappointment would first be confirmed by shareholders at the pending annual general meeting (AGM) of the company.

The third pertained to the public announcement.

“It was further expressly agreed that nothing would be disclosed to the public until both the aforementioned conditions are satisfied,” he said.

Tata Sons did not comment.

“Notwithstanding the above, the company has issued a statement which has been widely reported in the media,” Noel Tata said in the letter. “The statement contains no whisper of the conditions agreed to in the board meeting. In light of the above, I request the company to provide a written explanation and issue a public correction. And then confirm that no further steps will be taken and ensure everything is recorded.”

Noel Tata voted against the move, while Venu Srinivasan supported it. With the two Tata Trusts nominee directors taking opposing positions, the matter went to a casting vote, with Harish Manwani voting in favour of Chandrasekaran’s reappointment.

The meeting took place against the backdrop of the Reserve Bank of India rejecting Tata Sons’ request to surrender its core investment company registration and remain outside the regulatory framework applicable to upper-layer NBFCs. The RBI decision effectively requires Tata Sons to comply with the applicable regulations, including the requirement to list.

Shortly after the meeting, Tata Sons said in a statement that its board had, by a majority decision, resolved to reappoint Chandra as executive chairman for five years at the end of his current term. It also said the board had resolved to “initiate steps to comply with the applicable RBI (Reserve Bank of India) guidelines and will seek guidance from RBI, Tata Trusts and other stakeholders.”

Tata Trusts subsequently said it considered the board’s decision to reappoint Chandra for five years to be illegal.

Also Read: N Chandrasekaran reverses decision, agrees to five more years as Tata Sons chairman

“It would be extraordinary for any director to lay down mandatory preconditions for voting on board resolutions,” said a highly placed executive on the letter sent to the Tata Sons board by Tata. “It is unprecedented and without any legal or customary basis. The objections can be stated in response to the board minutes and not pre-emptively in this manner.”

The developments have triggered a broader disagreement between Tata Trusts and Tata Sons over the validity of the board resolutions, the conditions attached to the voting and the interpretation of the company’s Articles of Association.