Noel Tata challenges mode of Chandra's reappointment
bengaluru/Mumbai, Sept. 21 -- The board of Tata Sons applied two different constitutional rules in 2022 and 2026 to reappoint its chairman, Tata Trusts chairman Noel Tata claimed, after N. Chandrasekaran won a third term at the helm of the conglomerate following a controversial vote.
Noel also said the board made the announcement even though the directors had agreed not to disclose the matter until a legal opinion was secured, and a general meeting approved Chandrasekaran's directorship.
After nearly four hours of unusual events at Thursday's meeting, Tata Sons released a one-page statement, saying its board had "resolved by a majority" to reappoint chairman N. Chandrasekaran for five more years. After Tata Trusts nominees Noel and Venu Srinivasan cast opposing votes, Harish Manwani who chaired the process made the casting vote in favour of the reappointment, in a defeat for Noel.
In two letters sent after Thursday's contentious board meeting, Noel expressed his "serious disappointment" and "strong objection" to the board's actions.
"Conduct of this kind is an affront to the board and to the basis on which its members, including myself, participated in today's proceedings. To communicate to the public and to the market that a decision has been finally taken, when the directors of the company were assured that the matter remained conditional and unresolved, is irresponsible and carries the plain potential to mislead the shareholders, the employees, the lenders and the wider market," Noel wrote to Suprakash Mukhopadhyay, Tata Sons group company secretary.At the heart of the matter are two key articles in Tata Sons articles of association.
While Article 118 specifically governs the selection of chairman, Article 121 covers broader strategic matters.In his letter, Noel denounced the entire reappointment as illegal from the start. The letter also reminded that at the board meeting, he had pointed out that Article 118 is the right instrument, which was used in 2022 to reappoint Chandrasekaran....
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