Tata Trusts, the majority shareholder of Tata Sons with a holding of approximately 66%, escalated its dispute with the group's holding company on 20 September 2026. In a
statement issued from Mumbai, the Trusts said the board resolution reappointing N Chandrasekaran as chairman of Tata Sons was not validly passed and has no legal effect. They described it as
void ab initio, a Latin phrase meaning invalid from the very beginning. The resolution was considered at a board meeting on 17 September 2026.
The Vote and the Trusts' Reading of the Rules
The Trusts' case rests on the articles of association (AoA) of Tata Sons. According to their statement, the articles do not leave board decisions to a simple head count of directors. They also require the affirmative support of at least a majority of the directors nominated by the Trusts, and the Trusts treat this as a separate condition.
Only two directors on the Tata Sons board are Trusts nominees. As the statement put it, "Majority amongst two is two and not one." At the meeting on 17 September 2026, Noel Tata, chairman of Tata Trusts, voted against Mr Chandrasekaran's reappointment, while Venu Srinivasan, the other Trusts nominee, voted in favour.
The Trusts argued that this overall tally does not matter. Because one of the two nominees withheld support, the separate condition in the Articles was not met. "The condition failed, and so did the resolution," the statement said. "Whether the result of the vote was 4:1, or any other figure, is irrelevant. A condition is either met, or it is not."
Why the Casting Vote Does Not Help
The Trusts also rejected the suggestion that the split between their two nominees created a deadlock which the chairman of the meeting could then break with a casting vote. They said a casting vote is available only where votes are equal at the level of the full board. It has no application to a disagreement among the Trusts' nominees and cannot supply the support the Articles require from them.
The statement went further and denied that any deadlock existed. "There was no paralysis and there was no deadlock. The Board put a question, and the AoA answered it in the negative," it said. It described the use of a protective right granted by a company's own constitution as that constitution "working as it was written to work," and not as a deadlock.
The Cyrus Mistry Litigation
The Trusts also drew on the legal battle that followed the removal of Cyrus Mistry as chairman of Tata Sons. Two provisions of the AoA were in issue in that litigation. Article 104B gives the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, acting jointly, the right to nominate one-third of the Tata Sons board. Article 121 requires board decisions to also secure the affirmative vote of a majority of the Trust-nominated directors present.
According to the Trusts, the national company law appellate tribunal (NCLAT) had held these voting rights to be oppressive and the complainants had asked for the provisions to be deleted or confined. Tata Sons resisted that attempt. It defended the rights as a legitimate protection agreed between shareholders and argued that, far from being oppressive, they were the entitlement of the Trusts as majority shareholder. The Supreme Court of India accepted the company's case and set aside the finding that the Articles were oppressive.
From this, the Trusts concluded that Tata Sons cannot now take the opposite position. "The Company cannot now disown the protection it went to the Supreme Court to preserve," the statement said. "They are either in the Articles or they are not. Tata Sons has already told the highest court in the country that they are." It added that Articles of Association are not "a convenience to be relied upon when they help and ignored when they don't."
The Trusts called it unfortunate that the chairman of a company known for high standards of corporate governance was defending his reappointment on what they termed an untenable interpretation of the AoA.
Rejecting the Listing Argument
The statement also took up the contention that listing Tata Sons would bring better corporate governance. Tata Sons has faced pressure to list after the Reserve Bank of India (RBI) rejected its application to surrender its registration as a Core Investment Company. As an upper-layer non-banking financial company, it must list within a prescribed timeline under the RBI framework.
The Trusts said this argument assumes a governance gap that does not exist. They pointed out that Tata Sons has for years chosen to hold itself to the standards of a public company. Its AoA include provisions on the appointment of independent directors, an audit committee, a nomination and remuneration committee, related party transactions and the retirement of directors by rotation. The company also follows a code of conduct to prevent insider trading. The Trusts said all of this is recorded in the company's published annual reports and corporate governance reports, and that it was adopted voluntarily, long before the present questions arose. "A company that adopted these standards by choice is not a company in need of the discipline that listing is said to supply," the statement said.
The Trusts said the real question is not which framework, or which set of people, would govern Tata Sons better. It is who would remain in the room to speak for the millions of underserved and excluded Indians who have been at the centre of the Trusts' work for more than 130 years.
The statement hardens positions after the 17 September 2026 meeting, at which the Tata Sons board backed Mr Chandrasekaran for another term, despite Noel Tata's opposition. Mr Chandrasekaran had earlier indicated that he would not seek another term after his current tenure ends on 20 February 2027. Noel Tata has maintained that the group should proceed with a leadership transition and begin the process the AoA prescribe for selecting a new chairman.
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