Tata Trusts Chairman Noel Tata has sought the video recording and minutes of the September 17 Tata Sons board meeting at which N Chandrasekaran was reappointed as executive chairman for another five years.
In a September 30 communication to the Tata Sons board, Noel Tata also questioned how legal opinions supporting the reappointment were obtained after the meeting and argued that he did not receive adequate time to present his legal position.
Dispute Over the September 17 Vote
The Tata Sons board approved Chandrasekaran’s reappointment by a 4-1 vote. Noel Tata was the only director to oppose the resolution, while Tata Trusts nominee Venu Srinivasan supported it.
The voting process became contentious because of provisions in Tata Sons’ Articles of Association concerning the voting rights of Tata Trusts’ nominee directors and the chairman’s casting vote.
Noel Tata had presented a legal report from former Chief Justice of India D.Y. Chandrachud, arguing that the chairman’s casting vote could not override the specific affirmative voting rights provided to Tata Trusts’ nominees.
Legal Opinions Differ
Tata Sons obtained additional legal opinions following the September 17 meeting from former Supreme Court judges U.U. Lalit and B.N. Srikrishna. Their opinions supported the validity of the board resolution and concluded that the chairman’s casting vote could be used to resolve the voting deadlock under Article 121.
Earlier, senior counsel Sudipto Sarkar had also given an interpretation under which the casting vote could apply in circumstances involving an equality of votes among Tata Trusts’ nominees or across the full board.
The differing interpretations centre on how Article 121 of Tata Sons’ Articles of Association should be applied.
Noel Tata Questions Meeting Process
According to the Economic Times report, Noel Tata has questioned the manner in which the subsequent legal opinions were presented to the board.
He also sought access to the September 17 meeting’s recording and minutes to examine the proceedings and the discussion surrounding his objections.
Corporate lawyer Vyapak Desai told ET that a director does not have an unrestricted legal right to obtain a complete recording of a board meeting. However, governance practices may allow access to relevant portions for reviewing discussions and commenting on draft minutes.
Tata Sons Listing Issue Adds to the Dispute
The leadership dispute comes alongside a broader disagreement between Tata Trusts and Tata Sons over the company’s future structure.
The Reserve Bank of India has determined that Tata Sons is subject to rules requiring certain large shadow banks to become publicly held. Tata Sons subsequently said its board had decided to begin steps to comply with applicable RBI requirements.
Tata Trusts and Tata Sons have differed over several aspects of the company’s governance and proposed listing, making Chandrasekaran’s reappointment part of a wider corporate governance dispute.
The latest request from Noel Tata puts the focus back on the September 17 board process and the interpretation of Tata Sons’ voting provisions.
