Tata Sons approves crucial change to Article 118 of its Articles of Association

1 Sep 2022 , 12:49 PM

At its annual general meeting (AGM) on Tuesday, Tata Sons unanimously approved every motion, including the change to Article 118 of the Articles of Association that will prevent the same individual from leading the group’s holding company and its largest shareholder. According to the modified article, a selection committee shall be established to recommend both the appointment and removal of the current chairman. The appointment of a person as the chairman of Tata Sons also requires the positive vote of all directors nominated in accordance with Article 104B.

Tata Trusts, the largest shareholder in Tata Sons, is seeking legal advice to investigate the feasibility of putting a condition in the trust deeds prohibiting the same individual from leading both Tata Sons and its largest shareholder entity while upholding the founders’ wishes.

After the change, the largest Tata Trusts, the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, will choose the head of the committee from among the nominees they have chosen. The Sir Dorabji Tata Trust and the Sir Ratan Trust will jointly nominate the quorum for a meeting of the selection committee.

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