Noel Tata was appointed Chairman of Tata Trusts, the charitable division of the Tata Group, less than 48 hours after veteran industrialist Ratan Tata’s demise.
However, due to a rule made by the Tata Board in 2022, Noel Tata cannot take over as Chairman of Tata Sons, the holding company of the Tata Group with over 100 companies under it.
According to the Articles of Association of Tata Sons, one individual cannot be Chairman of both Tata Trusts and Tata Sons simultaneously.
Tata Sons amended Article 118 of the Articles of Association in 2022, which deals with the process for the appointment of a Chairman of the Board.
“… provision of Section 14 of Companies Act, 2013 and other applicable provisions of the Act and rules made thereunder, if any, as amended from time to time, consent of members be and is hereby accorded to amend the Articles of Association of the Company, by incorporating the following in Article 118…..To prevent any one individual from being Chairman of both Tata Trusts and Tata Sons simultaneously,” according to Tata Sons annual report for FY 22.
As Noel Tata is currently the chairman of Tata Trusts, he cannot be appointed chairman of Tata Sons.
Ratan Tata was the last Tata Chairman to head both Tata Trusts and Tata Sons simultaneously.
Noel Tata’s appointment
Noel Tata was appointed as the Chairman of Tata Trusts on October 11.
“It was unanimously decided to appoint Mr. Noel Naval Tata as the Chairman of the various Trusts that constitute the Tata Trusts and also designate him as Chairman, Tata Trusts. His appointment comes into place effective immediately,” the company said in a statement.
Tata Sons is the holding entity of all Tata Group companies. Currently, Tata Trusts has a 66 per cent stake in Tata Sons, giving Noel Tata indirect authority to make decisions for Tata Sons. However, due to the 2022 amendment in the Articles of Association, he will not get direct power to make decisions for Tata Sons.
