Tata Trusts denies any deadlock in September 17 board meeting, questions mandate for vote

Tata Trusts, the majority owner of Tata Sons, has challenged the validity of Tata Sons’ September 17 decision to re-appoint N. Chandrasekaran as its chairman, arguing that the company’s articles of association require the concurrence of both its Trust-appointed directors. The chairman’s vote – or a tie – cannot override this condition, Tata Trusts said.

Tata Trusts also denied the existence of any impasse in the Tata Sons board meeting held on 17 September. It insisted that the casting vote of the chairman of the meeting, independent director Harish Manwani, which led to the board passing two crucial resolutions by majority vote, had no standing.

“The Articles of Association (AoA) of Tata Sons do not leave any board decision to the mere number of board members. It stipulates that no decision can be taken without the affirmative support of at least a majority of the board members nominated by Tata Trusts, who hold approximately 66% of the company,” Tata Trusts said in a statement on Sunday, September 20.

“Most twos are twos”

Stating that this is a separate condition under the AoA, Tata Trusts said: “There are two nominees of Tata Trusts (Venu Srinivasan and Noel Naval Tata) on the board of Tata Sons. The majority is two and not one.”

“On September 17, 2026, one such director (Noel Naval Tata) voted against the resolution. Hence, no affirmative support was given to the Nominee Directors of Tata Trusts as mandated by the AoA. The condition failed and so did the resolution,” Tata Trusts pointed out.

Pointing out that the casting vote of the Chairman is only available where there is a tie at the overall board level, the Tata Trusts said this is not the case among the nominee directors of the Tata Trusts. “Whether the result of the vote was 4:1 or any other figure is irrelevant. Either the condition is met or it is not. In this case, the condition was not met,” it said.

‘No paralysis or deadlock’

“There was no paralysis and no deadlock on the suggestion that the refusal of support (by Mr Tata’s director nominee) constituted a stalemate that would paralyze the company and that the chairman of the general meeting was therefore entitled to resolve the position by a casting vote,” it reiterated.

“The board asked the question and the AoA answered it in the negative. The exercise of the protective right conferred by the company’s own constitution is not at a standstill; the point is that that constitution works as written,” Tata Trusts said.

According to Tata Trusts, the resolution to reappoint N. Chandrasekaran as chairman of Tata Sons, discussed at the September 17 board meeting, was not validly passed and has no legal effect.

“It is void ab initio (from the beginning) in the eyes of the law,” it reiterated.

“One cannot deny the protections supported by the Supreme Court”

Tata Trusts said the statutes are not comfortable to be relied upon when they help and ignored when they don’t, saying, “Tata Sons is not entitled to take this position as it has already taken the opposite position and won in the Supreme Court.”

In the proceedings arising out of the removal of former Tata Sons chairman Cyrus Mistry, the affirmative voting rights of nominee directors of the Trusts under Articles 104B and 121 were directly at issue, the company said.

“The National Company Law Appellate Tribunal held them to be oppressive and the appellants (Mistry & his SP Group Co) asked that they be struck down or restricted. Tata Sons resisted this attempt. It defended these rights as legitimate protections agreed to by shareholders, arguing that far from being oppressive, it was in fact a claim of the Trusts as the majority shareholder.”

In 2020, the Supreme Court of India accepted the Tata Sons case and set aside the finding that the articles were oppressive.

“The company cannot now waive the protections it has approached the Supreme Court for. They are either in the articles of association or they are not. Tata Sons has already told the highest court of the country that it is,” the company said.

“No Gap in Corporate Governance”

“It is unfortunate that the chairman (Mr Chandrasekaran) of Tata Sons, a company renowned for setting high standards of corporate governance, is fighting for re-appointment on such an unsustainable interpretation of the articles of association,” it said.

On the suggestion that the listing will bring about better corporate governance, Tata Trusts said there is no governance gap argument. “Tearing down a hundred-year-old structure to fill an imaginary gap is like cracking a nut with a sledgehammer,” he said.

High standards

“Independent of the listing, Tata Sons has for years chosen to adhere to the standards of a public company. Its own AoA contains provisions applicable to public companies, including the appointment of independent directors, the establishment of an audit committee and a nomination and remuneration committee, provisions governing related party transactions and retirement of directors by rotation, along with a code of conduct to prevent insider trading,” Tata Trusts noted.

It said this was done voluntarily, for reasons of transparency and governance, and long before any of the current issues arose. “A company that has adopted these standards voluntarily is not a company that needs the discipline that a listing is said to provide,” he emphasized.

“The question is not which framework runs Tata Sons better or who runs Tata Sons better. Rather, it is who is left in the room to speak for the millions of underprivileged and excluded Indians who have been at the heart of everything Tata Trusts has done for over one hundred and thirty years,” the statement said.

Published – 20 Sep 2026 17:17 IST