The resolution to reappoint N Chandrasekaran as Chairman of Tata Sons at the company’s September 17 board meeting was not validly passed, according to a statement challenging the decision on the grounds of the voting rights of Tata Trusts’ nominee directors.
The statement said Tata Sons’ Articles of Association (AoA) require the affirmative support of a majority of directors nominated by Tata Trusts, which hold approximately 66 per cent of the company. With two Tata Trusts nominees on the board, the statement argued that both directors were required to support the resolution.
It said one of the two nominees voted against the resolution on September 17, meaning the required condition under the AoA was not fulfilled. The statement further argued that the Chairman’s casting vote applies only in the event of an overall equality of votes on the board and cannot be used to overcome the separate requirement concerning Tata Trusts’ nominees.
The statement described the resolution as void ab initio and rejected suggestions that the vote had resulted in a board deadlock.
It also referred to the Supreme Court’s earlier judgment in the Cyrus Mistry case, arguing that Tata Sons had previously defended the affirmative voting rights of Tata Trusts’ nominees under Articles 104B and 121.
The statement further said Tata Sons had voluntarily adopted several public-company governance provisions, including independent directors and audit committees, irrespective of any listing.