Tata Sons has rejected Noel Tata's objections to N Chandrasekaran's reappointment as chairman, saying the special selection process under Article 118 applies only to a first appointment, not a reappointment.
The company backed its position with legal opinions from Sudipto Sarkar, Uday Lalit and BN Srikrishna, all of whom affirmed the validity of the board's resolution.
Tata Sons also addressed the August 18 AGM, which was adjourned for lack of quorum after Tata Trusts failed to nominate a joint representative as required under Article 86.
Tata Sons Says Chandrasekaran's Reappointment Is Valid, Dismisses Noel Tata's Objections
Dated September 24 and addressed to Noel Tata, who heads Tata Trusts, the letter stated that Chandrasekaran's continuation had already secured board backing through a majority vote once his ongoing term lapses
N Chandrasekaran, Chairman, Tata Sons (left) and Noel Tata, Chairman, Tata Trusts
Summary
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A letter from Tata Sons has dismissed the concerns Noel Tata put forward regarding N Chandrasekaran continuing in the chairman's role at the conglomerate's holding company, the Economic Times reported.
Dated September 24 and addressed to Noel Tata, who heads Tata Trusts, the letter reportedly stated that Chandrasekaran's continuation had already secured board backing through a majority vote once his ongoing term lapses. Tata Sons maintained that this outcome was consistent with company law as well as its own governing charter, adding that legal counsel had guided how those provisions were read.
Dispute Over Which Rule Applies
The disagreement traces back to a clause in the Articles of Association, Article 118, that comes into play when Tata Trusts together own 40% or more of the company's paid-up ordinary shares. This clause sets up a selection panel, drawn from nominees of the Sir Dorabji Tata Trust and Sir Ratan Tata Trust plus other named members, tasked with identifying a chairman candidate for the board to formally install. It applies equally when an existing chairman needs to be removed.
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Noel Tata had leaned on this clause to challenge how Chandrasekaran's term was being extended. Tata Sons countered that the clause was written for situations where a fresh chairman is being brought in for the first time, not for continuing someone already serving in that capacity.
The company noted that both sides had earlier agreed its supporting legal view would be shared publicly ahead of any statement, and that this had been done through an opinion from senior counsel Sudipto Sarkar. Once Noel Tata pushed back, Tata Sons said it also consulted former Chief Justice of India Uday Lalit and retired Supreme Court judge BN Srikrishna. Their conclusions, the company said, aligned with Sarkar's and reinforced that the board's vote stood on solid ground. Both opinions were attached to the letter sent to Noel Tata.
AGM Fell Through Over Quorum
The correspondence also revisited what happened at the company's annual general meeting on August 18, which could not proceed as planned because too few members were present to form a quorum.
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Tata Sons attributed this shortfall to Tata Trusts' failure to put forward a jointly agreed representative, a step mandated under a separate clause, Article 86. That provision requires at least one such representative, nominated together by the Sir Dorabji Tata Trust and Sir Ratan Tata Trust, to be physically present for the meeting to proceed.
The company pushed back firmly against linking that stalled meeting to the board's decision on September 17 to reappoint Chandrasekaran, describing any such connection as "plainly untenable."
Separately, on whether Chandrasekaran would remain a director of the company, Tata Sons said the matter would go before shareholders at a general meeting called under Section 152 of the Companies Act, 2013.
Company secretary Suprakash Mukhopadhyay signed off on the letter, which was also circulated to every director on the Tata Sons board.