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New Delhi, Read. A situation of confusion has arisen regarding the proposed Annual General Meeting (AGM) of Tata Group's holding company Tata Sons on August 18. The company's major shareholder Sir Ratan Tata Trust (SRTT) is not able to nominate its representative for the meeting due to regulatory restrictions imposed by the Charity Commissioner of Maharashtra. In such a situation, questions are being raised regarding organizing the AGM on the scheduled date.

However, Tata Sons has not yet informed shareholders of any change in the date of the meeting. Under the current circumstances the company may try to hold an AGM, but may have to adjourn the meeting if the required quorum is not met.

Decision on Chandrasekaran's director post also to be taken

An important proposal to Tata Sons Chairman N Chandrasekaran is also to be considered in the proposed AGM on August 18. Chandrasekaran has decided not to seek nomination for another term after the completion of his current term in February. In such a situation, the role of shareholders on this proposal during the AGM is being considered important.

Trouble between two trusts with 66 percent stake

The matter pertains to SRTT's 23.56 percent stake in Tata Sons. The trust has not been able to hold a meeting of its board of directors following the order of the Charity Commissioner of Maharashtra in May. In the order, it was asked to postpone the proposed meeting pending the investigation to the formation of the board of the trust. At the same time, Sir Dorabji Tata Trust (SDTT) has 27.98 percent stake in Tata Sons. The combined stake of both the trusts is about 66 percent.

Personal presence of five members is necessary for AGM

According to Article 86 of Tata Sons, personal presence of at least five members is necessary at the AGM. This also includes a jointly nominated representative from SRTT and SDTT, provided the combined shareholding of both the trusts is 40 per cent or more.

In such a situation, the situation of SRTT not nominating a representative may affect the quorum required for the AGM. The Shapoorji Pallonji family also holds about 18.37 percent stake in Tata Sons.

Board meeting not allowed, hurdle in nominating representative

According to a person directly familiar with the matter, in the current situation SRTT has not received permission from the Charity Commissioner to hold a meeting of the trust's board of directors. In such a situation, if the trust cannot hold a board meeting, then it is also difficult to jointly nominate representatives to participate in the AGM. Now all eyes are on the AGM of August 18. Whether the company tries to hold the meeting or has to adjourn it due to lack of quorum will be clear in the coming days.