|
The resolution to reappoint N Chandrasekaran as Chairman of Tata Sons was not validly passed at the companys September 17 board meeting as the mandatory support of Tata Trusts nominee directors was not secured, Tata Trusts said on Sunday.
According to Tata Trusts, Tata Sons Articles of Association (AoA) require the affirmative support of a majority of directors nominated by Tata Trusts, which hold approximately 66 per cent of the company. With two Tata Trusts nominees on the board, both directors would have to support the resolution for the separate condition under the AoA to be met. One of the two nominees voted against the resolution on September 17, meaning the required affirmative support was not available, the Trusts said. The Trusts further said the Chairmans casting vote cannot be used to overcome the failure of this condition, as such a vote is available only in case of equality of votes at the overall board level and does not apply to the requirement concerning Tata Trusts nominee directors. There was no paralysis and there was no deadlock. The Board put a question, and the AoA answered it in the negative, the Trusts said. The Trusts also referred to the Supreme Court proceedings arising from the removal of former Tata Sons chairman Cyrus Mistry, arguing that Tata Sons had previously defended the affirmative voting rights of Trusts nominee directors under Articles 104B and 121. The National Company Law Appellate Tribunal had held these rights to be oppressive, but the Supreme Court accepted Tata Sons position and set aside that finding, according to the release. The Trusts said Tata Sons therefore could not now disregard protections that it had previously defended before the Supreme Court. The release also rejected the argument that listing Tata Sons would be necessary to strengthen its corporate governance, pointing to existing provisions covering independent directors, audit and nomination committees, related-party transactions, retirement of directors by rotation and insider trading. The Trusts said these governance standards had been adopted voluntarily by Tata Sons before the current issue arose. (ANI)
|
