On Thursday, the Tata Trusts declared the board’s approval of N Chandrasekaran’s reappointment as chairman for another five‑year term illegal, arguing that Noel N Tata, one of the Trusts’ nominee directors, had voted against the resolution.
The Trusts cited the Articles of Association, which require a majority of the Trusts’ nominee directors to back a chairman’s appointment. They said that because Noel Tata opposed the move, the resolution was a legal nullity and could not stand.
The dispute erupted after the board, in a meeting held on the same day, also voted to move ahead with a planned listing of Tata Sons, the holding company, following the Reserve Bank of India’s rejection of the company’s request to surrender its core investment company registration.
Noel Tata had submitted a legal opinion from former Chief Justice D.Y. Chandrachud supporting the Trusts’ position, but the board did not take it into account. The Trusts now urge the company to set up a Selection Committee to appoint a successor.
The challenge will be heard at the annual general meeting, where shareholders and the majority stakeholder will decide whether to accept the Trusts’ claim and appoint a new chairman. If the court sides with the Trusts, the current reappointment could be undone before the AGM.