Tata Sons AGM Adjourned Over Quorum Gap: What Next For Chandrasekaran

Tata Sons’ annual general meeting (AGM) scheduled for Tuesday was adjourned for lack of quorum, marking the first such instance in the history of the Tata Group holding company, according to a report by The Economic Times (ET).

Tata Sons Chairman N Chandrasekaran and some board directors attended the meeting in person, while Tata Trusts Chairman Noel Tata and trustee Mehli Mistry joined online. The chairman is expected to consult the board before deciding on a fresh date for the AGM, officials told the newspaper.

The meeting was convened at Bombay House, with some stakeholders participating virtually. The required quorum could not be met after Sir Dorabji Tata Trust (SDTT), one of the two principal trusts controlling Tata Sons, informed the company that a joint representative could not participate without the Maharashtra Charity Commissioner’s approval concerning Sir Ratan Tata Trust (SRTT).

Why The AGM Could Not Go Ahead

The issue stems from restrictions imposed on SRTT by the Maharashtra Charity Commissioner. The curbs have remained in place amid complaints over the composition of the trust’s board and alleged non-compliance with provisions of the Maharashtra Public Trusts Act, according to the report.

SRTT and SDTT together hold 51.54% of Tata Sons. SRTT owns about 23.5%, while SDTT holds around 28%, making the participation of the trusts important for the meeting’s quorum.

Officials close to Tata Trusts had informed Tata Sons about the lack of quorum but could not direct the company not to convene the AGM. The meeting could therefore be held but would have to be adjourned, an official told ET.

Some Tata Trusts trustees have also approached the Charity Commissioner individually for relief, the report said. The move is understood to reflect concerns over whether SDTT can seek relief on behalf of SRTT.

What It Means For Chandrasekaran

The delayed AGM has also brought Chandrasekaran’s position into focus. He is liable to retire by rotation and requires reappointment as a director to remain on the Tata Sons board.

According to officials familiar with the company’s Articles of Association, if the AGM cannot be validly constituted because of the quorum issue, Chandrasekaran would continue as a director until a valid AGM is held and his reappointment can be considered.

Chandrasekaran joined the Tata Sons board in October 2016 and became chairman in January 2017. His position as chairman is linked to his continuing as a director.

However, Chandrasekaran has already communicated that he will not seek reappointment when his current term ends in February 2027. The legal implications of the failed AGM and the interpretation of Tata Sons’ Articles are now being examined, according to the report.