The decision to reappoint Tata Sons Executive Chairman N Chandrasekharan has been deferred at his request, according to a report by The Economic Times. He made the request after disagreements emerged during the board meeting on Tuesday.
According to The Economic Times report, during the meeting, Tata Trusts Chairman Noel Tata pointed out the losses made by the group’s new businesses, which led to an elaborate discussion on the matter.
The report said that other members of the board supported Chandrasekharan’s reappointment as Executive Chairman, arguing that the businesses making losses are greenfield investments that require more time to break even and turn profitable.
Noel Tata is understood to have proposed four conditions to be met for Chandrasekharan’s reappointment. The first being an assurance that Tata Sons would not be listed under the Reserve Bank of India’s guidelines for upper-layer NBFCs (Non-Banking Financial Companies).
The second being that the chairman would ensure that the company does not go into debt. The third being that Chandrasekharan would not overspend on high-risk investments that would lead to the company’s coffers being depleted. The fourth being that the company would ensure that losses that arose after the acquisition of Air India and BigBasket are managed tightly.
Post the discussion, board members proposed to vote on Chandrasekharan’s reappointment as Chairman of Tata Sons for the third time. However, he insisted on deferring the voting process, arguing that decision-making should be consensual.
His second tenure as chairman is set to conclude next year. Chandrasekharan’s reappointment would require changes in Tata Sons’ retirement policy for non-executive roles beyond the age of 65. Chandrasekharan will turn 63 in June.
Tata Trusts is the principal shareholder of the Tata Group, with Noel Tata and Venu Srinivasan serving as board members of Tata Sons. Other board members include Saurabh Agrawal, Executive Director and Group Chief Financial Officer, and independent directors Harish Manwani and Anita George.
