Tata Sons' AGM scheduled for tomorrow may be deferred over SRTT deadlock

Tata Sons, the holding company of around 100 Tata group companies, is likely to defer its scheduled annual general meeting (AGM) on August 18, following the non-convening of a mandatory board meeting of Sir Ratan Tata Trust (SRTT), which needs to jointly nominate a representative for the AGM along with Sir Dorabji Tata Trust (SDTT).

The Maharashtra Charity Commissioner is yet to grant permission to SRTT trustees to convene a meeting and nominate a joint representative for the AGM. The Charity Commissioner had stopped the SRTT board from meeting in May amid an ongoing inquiry into alleged violations of trustee composition norms under Section 30A(2) of the Maharashtra Public Trusts Act. Complaints, including one filed by vice chairman Venu Srinivasan, alleged that SRTT had exceeded the legal 25% cap on lifetime or perpetual trustees.

Tata Trusts Chairman Noel Tata and trustees Darius Khambata and Jehangir H.C. Jehangir have written to the Charity Commissioner seeking permission to convene the SRTT board meeting. "They have cited three immediate duties of the board that remain pending due to the restriction on meetings—approving accounts, allocating funds for charitable projects and selecting a nominee for the Tata Sons AGM," said sources familiar with the matter. The AGM has been scheduled for Tuesday afternoon and the company has not communicated about the deferment yet.

A decision from the Commissioner is unlikely before the scheduled AGM, according to sources. “So it will have to be deferred till the permission comes,” a source said.

Article 86 of Tata Sons’ Articles of Association (AoA) specifies the quorum requirements for its AGM. Under the provision, a valid quorum will be met with the presence of an authorised representative jointly nominated by SDTT and SRTT.

The two trusts hold about 66% of Tata Sons, making their representation critical to the functioning of the holding company. If the required joint representative is not present, the quorum could fail, potentially preventing the AGM from being held.

The AGM is significant as it will be the first shareholder meeting of Tata Sons since N. Chandrasekaran announced his exit as chairman following differences with Tata Trusts Chairman Noel Tata over several key issues, including the proposed listing of Tata Sons, facilitating the Shapoorji Pallonji Group’s exit, and the financial performance and strategy of the group’s new businesses.