This week, the board of Tata Sons, one of India’s oldest conglomerates and owner of renowned British brands such as Jaguar Land Rover and Tetley Tea, defied its largest shareholder, Tata Trusts, by reappointing N Chandrasekaran as chairman and backing the holding company’s public listing.
Tata Trusts, which owns 66% of Tata Sons, termed the decision “illegal” under its articles of association and opposed the listing, paving the way for prolonged turmoil and possibly a protracted judicial drama at Bombay House, the company’s 158-year-old headquarters.
The Tatas, who are no strangers to boardroom disputes, are now facing a cloud of uncertainty on numerous levels. The resolution to reappoint Chandrasekharan, while accepted by the board, may be lost at the company’s Annual General Meeting because Tata Trusts is expected to vote against it, casting doubt on his future.
According to reports, the meeting must take place by December 31. The previous meeting was adjourned due to a lack of quorum, but no new date has been scheduled.The Nomination and Remuneration Committee (NRC) of Tata Sons’ Board, which reappointed him, has no authority to make this choice. They can only give recommendations. Furthermore, their action violates the company’s governance rule, which requires executives to retire from active duties at age 65.
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