The Trusts also rejected the argument that a listing is necessary to improve governance, pointing to Tata Sons’ existing Articles and governance practices.
“Tata Sons has for years chosen to hold itself to the standards of a public company,” the Trusts said, citing provisions covering independent directors, audit and nomination and remuneration committees, related-party transactions, retirement of directors by rotation and insider trading.
“It was done voluntarily, for reasons of transparency and governance, and long before any of the present questions arose,” it said.
The Trusts concluded by framing the dispute as one over the preservation of their role in Tata Sons and the wider Tata Group, saying the issue was not simply “which framework governs Tata Sons better or who governs Tata Sons better” but “who is left in the room to speak for the millions of underserved and excluded Indians” who have been at the centre of the Trusts’ philanthropic work.
The legal validity of the September 17 board resolution is now the central point of contention between the two sides, with the Trusts asserting that the resolution is void and Tata Sons having proceeded on the basis that Chandrasekaran has been reappointed for another five-year term.
“The company cannot now disown the protection it went to the Supreme Court to preserve. 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 said. “It is unfortunate that the Chairman of Tata Sons, a company renowned for setting high standards of corporate governance, is contending reappointment on such an untenable interpretation of the Articles.”
On arguments for listing improving governance, the Trusts said that amounted to “pulling apart a hundred-year-old structure to fill an imaginary gap is taking a sledgehammer to crack a nut.”
“It is also suggested that listing is to be welcomed because it will bring enhanced corporate governance. That argument assumes a governance gap which does not exist. Independently of listing, Tata Sons has for years chosen to hold itself to the standards of a public company. Its own AoA contain provisions applicable to public companies, including the appointment of independent directors, the constitution of an audit committee and a nomination and remuneration committee, provisions governing related party transactions and the retirement of directors by rotation, together with a code of conduct for the prevention of insider trading,” the statement said.
A company that adopted these standards by choice is not a company in need of the discipline that listing is said to supply, it added.