Tata Sons, the holding firm for the Tata Group, has written to the Ministry of Corporate Affairs looking for approval for chairman N Chandrasekaran to chair the boards at a couple of more group companies. This, because the chairman has already touched the prescribed restrict on the Tata Group.
Currently, Chandrasekaran is the chairman of Tata Motors, Tata Steel, Tata Consumer Products, Indian Hotels Co, Tata Power, Jaguar Land Rover, Tata Consultancy Services and Tata Chemicals, amongst others. He will quickly take cost of Air India, Tata Digital and Tata Electronics.
Tata Sons didn’t remark.
Traditionally, the Tata Sons chairman additionally chairs the boards of group companies which are seen as necessary and people needing consideration.
Under the Companies Act, 2013, a person generally is a director of not more than 20 companies on the identical time. The restrict of 20 companies consists of non-public companies and alternate directorships. Also, of the 20 companies, an individual can’t be a director of more than 10 public companies.
According to Sanjay Asher, senior associate at legislation agency Crawford Bayley & Co, there isn’t any provision in legislation the place the regulator or the statutory authority underneath the Act, which is to say the MCA, has the facility to grant dispensation from compliance to any particular person.
“It is possible for a closely held public company to convert itself into a private company in order to provide a berth to an individual to be appointed as its director, so that the concerned individual can accept the directorship within the prescribed limits,” mentioned Asher, who can also be on the boards of a number of public companies together with Ashok Leyland and Deepak Nitrite. “I would also state that it is not difficult to convert a closely held public company into a private company. It’s a process that has to be followed and completed,” he mentioned, including: “Having regard to the facts and circumstances, it will not be possible for an individual to be a director of more than ten public companies.”
Last week, Tata Sons reappointed Chandrasekaran as its govt chairman for an additional 5 years, as his first time period ends this month.
According to Anand Desai, managing Partner of legislation agency DSK Legal, as enterprise grows, it’s probably a group can have a number of companies for various companies. “Any limit on directorship is to achieve a certain purpose, however, the government may consider excluding group companies from such clauses, since a group chairman would be actively involved in major decisions and may require being a director in several companies,” mentioned Desai.
https://cfo.economictimes.indiatimes.com/news/tatas-want-n-chandrasekaran-to-helm-three-more-group-companies/89605803
