- Tata Sons and Tata Trusts dispute is headed for a legal battle, says Singhvi
- Singhvi says conflict exceeds boardroom compromise and may be irreversible
- Dispute centers on N Chandrasekaran’s reappointment as Tata Sons chairman
The escalating rift between Tata Sons and Tata Trusts is “definitely” headed towards a legal battle, according to senior advocate Abhishek Manu Singhvi, the senior lawyer representing Tata Trusts. In an exclusive interview with NDTV Editor-in-Chief Rahul Kanwal, Singhvi said the dispute had been building for some time and had now moved beyond the point where a boardroom compromise appeared possible.
“It appears that it is now irreversible, except through a legal battle,” Singhvi said. He added that while his preference would be to avoid litigation, “it is difficult, if not impossible” because the situation had moved “far beyond what they should have reached.”
The immediate dispute centres on N Chandrasekaran's reappointment as executive chairman of Tata Sons.
Singhvi argued that the core issue is not an individual disagreement involving Noel Tata or Chandrasekaran, but the authority of Tata Trusts, which he described as the 66%-odd shareholder-owner of Tata Sons.
“It is not about Noel Tata... It is about the primacy of a 66% collectivity called a trust,” Singhvi said. He argued that a board cannot effectively become a “runaway board” by taking decisions despite the active disagreement of the controlling shareholder.
Singhvi also maintained that the Tata Sons listing question is separate from the chairman appointment dispute, calling the listing issue a “red herring”.
He said Tata Sons' application for deregistration as a core investment company had been rejected by the RBI only recently, and argued that any potential listing should not be conflated with the leadership dispute.
But senior advocate Harish Salve, who is advising Chandrasekaran, offered a sharply different interpretation. Salve said the real issue is the proposed listing of Tata Sons and the regulatory direction behind it. He argued that the RBI's requirement for listing brings corporate governance considerations to the forefront and said the legal questions surrounding the board vote should ultimately be decided by a court.
Singhvi said the sides would have to fight the matter through their respective legal remedies. “This is a legal matter. We're going to fight it out in court,” he said, while reiterating that he regretted the breakdown between the principal actors.
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