Tata Sons AGM Deferred Due to Lack of Quorum

The annual general meeting of Tata Sons has been adjourned due to a lack of quorum, marking the first instance in the company's history. The meeting was convened at Bombay House, with some stakeholders joining online, but the required quorum was not met due to the absence of the Maharashtra Charity Commissioner's approval for Sir Ratan Tata Trust (SRTT).

The Charity Commissioner had issued the restraint under Section 36A(1) of the Maharashtra Public Trusts Act following complaints regarding the composition of the SRTT board and alleged non-compliance with Section 30A(2) of the Act.

The uncertainty over the AGM has also brought into focus the position of Tata Sons chairman N Chandrasekaran, who is liable to retire by rotation. Officials familiar with the Articles of Association said that if the August 18 meeting could not be validly constituted because of lack of quorum, Chandrasekaran would continue as a director until a valid AGM is held at which his reappointment can be considered.

Some trustees of Tata Trusts have approached the Charity Commissioner in their individual capacities seeking relief, officials said. The move is understood to stem from the view that SDTT cannot seek such relief on behalf of SRTT.

SRTT and SDTT together hold 51.54% of Tata Sons, with SRTT holding about 23.5% and SDTT about 28%.

## Legal Implications

The interpretation of Tata Sons' Articles and the legal implications of an AGM that fails to meet the prescribed quorum are consequently being examined, people familiar with the matter said.

Under the Companies Act, a director liable to retire by rotation continues in office until the relevant AGM, where shareholders are required to either reappoint the director or fill the vacancy. The law, however, does not expressly detail the consequences where an AGM itself cannot be validly convened because of lack of quorum.

## Chandrasekaran’s Position

Chandrasekaran joined the Tata Sons board in October 2016 and became chairman in January 2017. He requires reappointment as a director to continue on the board, with his position as chairman legally contingent on his continuing as a director. Chandrasekaran has already communicated that he will not seek reappointment when his current term ends in February 2027.

The chairman will seek a fresh date for the AGM after consulting the board, officials said. The uncertainty over the AGM has brought into focus the position of Tata Sons chairman N Chandrasekaran, who is liable to retire by rotation.