Tata Sons, the principal investment holding company of the Tata Group, is reportedly planning to convene its annual general meeting (AGM) within the coming month. This move aims to resolve several pending corporate matters, even as the Sir Ratan Tata Trust (SRTT) remains under a freeze by the Maharashtra Charity Commissioner.
Chandrasekaran's Reappointment at the Core of Dispute
A key item on the AGM agenda will be the reappointment of N Chandrasekaran as a director. This particular issue is central to an ongoing boardroom dispute, pitting Tata Trusts chairman Noel Tata against other members of the Tata Sons board.
The company had previously received a three-month extension from the Registrar of Companies after its AGM, originally scheduled for August 18, was postponed due to a lack of quorum. Sources indicate that legal avenues are being explored to navigate this complex situation, emphasizing the urgency for Tata Sons to proceed with its corporate governance.
Quorum Issues Stem from Trust Restrictions
The lack of quorum for the earlier AGM stemmed directly from the restrictions imposed on SRTT. These limitations prevent the trust from holding meetings or making decisions, thereby hindering its ability to jointly nominate an authorized representative with the Sir Dorabji Tata Trust (SDTT) for the general meeting.
According to Article 86 of Tata Sons’ Articles of Association, a general meeting requires at least five members to be present. Crucially, this includes an authorized representative jointly nominated by SDTT and SRTT, provided their combined holdings exceed 40% of the paid-up ordinary share capital. Currently, SDTT owns 27.98% and SRTT holds 23.56%, totaling a significant 51.54% stake.
Potential Recourse to NCLT
To overcome the quorum hurdle, Tata Sons may consider approaching the National Company Law Tribunal (NCLT) under Section 97 of the Companies Act. This section grants the tribunal the power to direct that an AGM be held and to determine the manner in which it should be conducted.
Experts suggest that such an NCLT order could enable the meeting to proceed even without the joint SRTT-SDTT nominee. However, they caution that this legal intervention might not resolve the underlying boardroom dispute itself, which saw Noel Tata reportedly opposing Chandrasekaran’s reappointment and the proposed listing of Tata Sons during a recent board meeting, while other directors supported both proposals.