Tata Sons is said to have communicated to Tata Trusts, its biggest shareholder, that N Chandrasekaran’s reappointment as chairman for an additional five years was legitimate, as per the sources privy to the matter.
It has given three legal opinions to support its position on the resolution approved on September 17 during the Tata Sons board meeting. This addresses the questions posed by Tata Trusts to Tata Sons following the tumultuous board meeting held last week.
Sources suggested that Tata Trusts might decide on pursuing legal action regarding the resolution on Chandrasekaran’s reappointment after considering the message from Tata Sons.
Tata Trusts has been getting prepared to bring the boardroom conflict to court since the meeting on September 17. Last week, Supreme Court lawyer Abhishek Singhvi declared in a social media update that he would contest Chandra’s reappointment for the Tata Trusts.
Tata Sons has also been preparing with a robust team of attorneys, headed by former solicitor general Harish Salve, in anticipation of a potential court battle.
Tata Trusts is examining the response from Tata Sons, as per the source. Tata Sons and Tata Trusts did not provide any comments regarding the issue.
During the board meeting, Tata Trusts referenced DY Chandrachud’s opinion, the former chief justice of India, asserting that the decision to grant a third term to Chandrasekaran was not valid without a majority vote.
The two nominated directors — Noel Tata and Venu Srinivasan — voted against and in support of the resolution, respectively. A source mentioned that Tata Trusts received Chandrachud’s opinion a few months back.
A source stated that Tata Trusts received Chandrachud’s opinion several months ago. At the board meeting, Tata Sons presented a legal opinion from Sudipto Sarkar, a barrister and senior advocate, asserting that a casting vote can be utilised in the event of a tie among the nominee directors or the board collectively.
Sarkar expressed the opinion that the chairman leading the meeting (independent director Harish Manwani, since Chandra had stepped back due to the discussion of his reappointment) may be entitled to the deciding vote.
