Tata Sons and Tata Trusts have issued separate statements, detailing their versions of the boardroom battle that took place on Thursday. The board of Tata Sons has backed its current chairman, N Chandrasekaran, in extending his tenure by five years, over a month after his announcement that he would not seek reappointment. Noel Tata, the chairman of the Tata Trusts, which hold a 66 per cent stake in the conglomerate, opposed the move.
“That letter was thereafter placed in the public domain. I raise this not by way of complaint, and I accept that a Chairman is entitled to speak of his own intentions. The Group’s employees, its lenders, its counterparties and the market have all proceeded upon it. So has the majority shareholder. The page has turned. “The chairmanship of this Company is an office held by a director of this Company. The Chairman’s own position as a director is presently uncertain, the general meeting at which that question falls to be determined not having been able to proceed for want of quorum. Until that question is resolved, a resolution upon the chairmanship rests upon a foundation which has not yet been laid. “I would add a practical consideration. A decision upon the chairmanship taken now, and afterwards found to have been taken in respect of a person whose office as director was not free from doubt, would be open to serious legal challenge by any shareholder who chose to bring it. This Company should not expose itself to a challenge of that kind at any time. It should certainly not do so at a moment when it has matters of far greater consequence pending before its regulator,” he added.
Because a communication of that character, once public, has consequences which this Board cannot afterwards undo, i raise it. It was released without prior deliberation with the shareholders of this Company, and in particular without deliberation with the Tata Trusts, which hold approximately 66% of its equity.
The majority shareholder has acted upon it,” he said in the written statement. Tata argued before the board that the resolution would set aside “the Chairman’s own stated decision, the acceptance of that decision by the majority shareholder, and the further process which that shareholder has asked this Company to set in motion”. We cannot put the cart before the horse,” Tata said. He contended that it would not serve the company for a “regulatory development to determine the outcome of a succession”. He also said it was time to move on.
