Tata Trusts, the philanthropic entity that owns approximately 66% of Tata Sons, has engaged senior Supreme Court advocate Abhishek Manu Singhvi to represent its interests in a growing legal conflict with Tata Sons. Singhvi's involvement comes after Tata Trusts opposed the September 17 decision by the Tata Sons board to reappoint N Chandrasekaran as chairman for another five years, labeling the move "illegal" and a "legal nullity." This dispute also involves the potential listing of Tata Sons, following the RBI's rejection of the company's request to relinquish its Core Investment Company registration.
Singhvi expressed personal regret that the issues could not be resolved amicably, citing his past association with Ratan Tata and his personal relationships with key figures on both sides. However, he emphasized the necessity of a legal resolution due to a lack of "collegiality and conviviality." He questioned the restrictions placed on Tata Trusts' ability to convene meetings, calling it a matter of "patent legality," and defended the long-standing practice of unanimity in Tata Trusts' voting and its veto powers. Singhvi also referenced a previous Supreme Court judgment in the Tata-Mistry case, which he stated affirmed Tata Trusts' primacy in its relationship with Tata Sons.
The core of the conflict revolves around Article 121 of Tata Sons' Articles of Association, which mandates a majority vote from the Trusts' nominated directors on the Tata Sons board for certain resolutions. While Noel Tata, chairman of Tata Trusts and a board nominee, voted against Chandrasekaran's reappointment, the other Trusts' nominee, Venu Srinivasan, voted in favor. The meeting's chair, independent director Harish Manwani, used a casting vote to approve Chandrasekaran's reappointment, resulting in a 4-1 vote. Tata Trusts contends that a split vote from its nominees cannot be overridden by a casting vote and that the reappointment breaches the Articles of Association. This situation revives memories of the 2016 battle after Cyrus Mistry's removal, which also involved allegations of oppression and mismanagement.
