Tata Trusts Chairman Raises Questions Over Process of Reappointing N Chandrasekaran

Tata Trusts chairman Noel Tata has raised questions over the process followed by the Tata Sons board in reappointing N Chandrasekaran as executive chairman, seeking the video recording and minutes of the September 17 meeting and questioning the decision to obtain fresh legal opinions after the resolution was passed, people with knowledge of the matter said. In a communication to the Tata Sons board late last week, Noel Tata sought the recording and minutes of the meeting. Noel Tata has maintained that he did not get adequate opportunity during the meeting to present specific points arising from a legal opinion Noel Tata had obtained from former Chief Justice of India DY Chandrachud, the people said. Noel Tata had tabled the Chandrachud opinion before the board on September 17. The opinion dealt with the use of the Tata Sons chairman’s casting vote and the affirmative voting rights of Tata Trusts’ nominee directors. According to people familiar with the development, Noel Tata wanted to make submissions on these aspects and on how the relevant provisions of the company’s Articles of Association should be read. Noel Tata has also questioned the decision to seek further legal opinions after the board meeting, the people said. Tata Sons subsequently obtained opinions from former Chief Justice of India UU Lalit and former Supreme Court judge BN Srikrishna, both of whom supported the validity of the September 17 resolution and the use of the chairman’s casting vote to break the deadlock. The sequence is significant because the board had already approved Chandrasekaran’s reappointment at the September 17 meeting. The resolution was passed by a 4-1 majority, with Noel Tata voting against it and fellow Tata Trusts nominee Venu Srinivasan voting in favour. The Tata Sons board had obtained an opinion from senior counsel Sudipto Sarkar before the meeting, which took the view that the casting vote could be invoked in situations involving an equality of votes. The differences centre on the interpretation of the Tata Sons Articles of Association, particularly the circumstances in which the chairman can exercise a casting vote. The Chandrachud opinion held that such a vote could not create a majority where the Articles required a separate affirmative majority from a specified group of directors. A separate concern raised by Noel Tata relates to how the reappointment resolution was presented to the board. According to people familiar with the matter, Noel Tata has described it as a debrief from the nomination and remuneration committee (NRC).