Tata Trusts chairman Noel Tata has challenged the resolution reappointing N Chandrasekaran as chairman of Tata Sons, questioning the validity of the decision taken at the holding company’s board meeting on September 17, news agency PTI reported on Monday, quoting sources familiar with the development.
In a letter to Tata Sons company secretary Suprakash Mukhopadhyay on Monday, Noel termed the five-year reappointment resolution void, arguing that it was taken up out of turn and was not part of the meeting’s agenda, according to the report.
The meeting was meant to include a briefing from the nomination and remuneration committee, but the reappointment was not listed as an agenda item, Noel contended. He also sought an unedited video recording of the meeting.
The latest challenge deepens the rift between Tata Trusts, which collectively hold about 66% of Tata Sons, and the company’s board over Chandrasekaran’s continuation beyond February 2027.
Dispute over voting rights
Noel has argued that Tata Sons’ Articles of Association require the affirmative vote of Tata Trusts’ nominee directors for certain resolutions to be passed. He opposed Chandrasekaran’s reappointment at the September 17 meeting, while Venu Srinivasan, the other Tata Trusts nominee on the board, voted in favour.
Four directors supported the reappointment. Tata Sons has maintained that the board validly approved the decision by a majority, relying on its interpretation of the Articles of Association and legal advice.
A separate report by Financial Express on Monday said Noel had also questioned the filing of Chandrasekaran’s reappointment with the Ministry of Corporate Affairs before the minutes of the September 17 meeting were finalised. The report said he renewed his request for the original audio-video recordings and questioned disclosures relating to reported business links involving Chandrasekaran’s family and TVS Motor Company. Tata Sons has maintained that the necessary disclosures were made.
RBI reiterates listing requirement
The dispute comes amid continuing uncertainty over whether Tata Sons will have to list on the stock exchanges.
On Friday, Reserve Bank of India Governor Sanjay Malhotra said large non-banking financial companies (NBFCs) and core investment companies with direct or indirect access to public funds must register with the central bank. Those classified in the upper layer are required to list.
“As long as it is an NBFC within our definition, it is a CIC, it has access to funds, direct or indirect, it’s required to be registered. And if it is in the upper layer, then it is required to list,” Malhotra said.
The RBI had rejected Tata Sons’ application to surrender its core investment company registration in September, keeping the listing requirement in focus. Tata Trusts has proposed merging two operating companies into Tata Sons as an alternative that it believes could change the holding company’s regulatory classification.