The articles of association of Tata Sons says that board resolution should have a majority affirmative vote from the nominees of Tata Trusts. If a resolution does not get this majority affirmative vote, it is deemed to have not passed by the board. In the resolution pertaining to giving one more five-year extension to N. Chandrasekaran as Chairman of Tata Sons, the Tata Trusts nominees were split – one voted for it and another against. It is argued that a tie does not constitute a majority affirmative vote. Hence, the resolution on Chandrasekaran’s extension is not legal, it is stated.
Different tale
But then there is an entirely different argument. The board of Tata Sons, it is claimed, received from Tata Trusts their unanimous resolution dated July 28, 2025 reappointing Chandrasekaran for another five-term. In September last year, the board also agreed to give one more extension to him. In subsequent meetings of the board, the decision of his extension was deferred since there was no unanimity. Consequently, in August last Chandrasekaran announced that he did not want extension after the expiry of the current term. Early this month, the nomination and remuneration committee resolved to request Chandrasekaran to rethink on his decision and recommend his renomination. At the September 17 board meeting, he accepted the board suggestion and was renominated.
The split vote among the nominees of Tata Trusts has now become a contentious issue. Questions have now been raised about the validity or otherwise of the earlier resolution of Tata Trusts (as submitted to the board of Tata Sons) on Chandrasekaran’s renomination. That resolution has not been revoked by the Tata Trusts. That being the case, who among the nominees of Tata Trusts is right – the one who voted for Chandrasekaran’s reappointment or the one who opposed it. That question has now become a debating point.
The RBI rider
This Reserve Bank of India has only compounded the situation. What if the apex bank pushes Tata Sons (which comes in upper-layer NBFC bracket) for a listing. One theory is that the regulator has overriding powers and that its rules supercede the articles of association of a corporate entity. If that happens, the game changes drastically. Well, the Tata tangle is set for an interesting battle.