After the Tata Sons board on Thursday voted 4-1 in favour of retaining N. Chandrasekaran as the chairman of the company and deciding to publicly list the company, Noel Tata claimed his veto was wrongfully overridden based on a legal opinion.
Noel, who is the non-executive director of Tata Sons and chairman of Tata Trusts, was the only board member to vote against Chandrasekaran's appointment as chairman. Other board members, including non-executive director Venu Srinivasan, executive director Saurabh Agarwal and independent directors Anita M. George and Harish Manwani voted in favour.
Noel Tata is now planning to oust Chandrasekaran at the next Annual General Meeting (AGM) of Tata Trusts, which has to be held before December 31, according to sources cited by Moneycontrol.
The source revealed that once Chandrasekaran is ousted as director, he cannot continue in the post of chairman.
The next AGM is expected to be held once the legal troubles involving Sir Ratan Tata Trust (SRTT) are resolved. SRTT is currently facing a restraining order from the Maharashtra Charity Commissioner, stopping it from taking part in important decisions regarding Tata Sons.
With SRTT not participating in the decision making, the other principal trust, Sir Dorabji Tata Trust (SDTT), and the smaller trusts of the Tata Group are unable to make decisions on their own. If SRTT gets a legal relief in the issue, the next AGM of Tata Trusts is expected to be held soon after and it could move to oust Chandrasekaran and appoint his successor.
The Tata Trusts, including SRTT, SDTT and the smaller trusts, collectively own around 66 per cent of Tata Sons and hence could easily reverse the appointment of Chandrasekaran.
The situation is further complicated by RBI decision to reject Tata Sons' request to surrender its registration as non-banking financial company (NBFC) after becoming debt-free by repaying ₹21,000 crore.
After Tata Sons decision to go public, major Tata group stocks rose between 0.15 per cent and 5 per cent, led by Tata Investment Corp. Tata Motors Passenger Vehicles rose 5 per cent, while Tata Motors climbed 3 per cent. IT major TCS, which had risen as much as 3 per cent, pared gains and was last up 0.2 per cent.
