The Tata Sons board has backed the continuation of N Chandrasekaran as chairman of the group holding company, but the decision has triggered a dispute with Tata Trusts chairman Noel Tata.
The board reportedly voted 4-1 in favour of retaining Chandrasekaran. However, Noel Tata opposed the decision and questioned its validity, saying the process violated governance provisions.
“I voted against Chandra’s appointment as chairman. My veto was wrongfully overridden on the basis of a legal opinion. The decision is illegal. I recorded my dissent,” Tata was quoted as saying in a report by Moneycontrol.
Board decision sparks governance dispute
The disagreement centres on an article in the Tata Sons Articles of Association, which states that a majority of directors appointed by Tata Trusts must approve certain consequential decisions.
According to the report, Tata Trusts could seek Chandrasekaran’s removal at the company’s Annual General Meeting (AGM). “Once he is ousted as a director he cannot continue as chairman,” a person was quoted as saying in the report.
The board reportedly proceeded based on a legal opinion that the chairman has a casting vote in case of a deadlock. Tata Trusts, which collectively owns around 66% of Tata Sons, has questioned that interpretation.
The Tata Sons board includes Chandrasekaran, Noel Tata, Venu Srinivasan, Saurabh Agrawal, Harish Manwani and Anita Marangoly George.
Succession process faces uncertainty
The latest development comes weeks after Chandrasekaran decided not to seek another term after his tenure ends on February 20, 2027. Following that decision, Sir Dorabji Tata Trust (SDTT) had said it respected his choice and began the process of forming a selection committee to identify the next chairman.
The focus now shifts to Tata Sons’ pending AGM, which must be conducted by December 31. Chandrasekaran’s retirement by rotation as a director means his continuation will require shareholder approval.
The two principal Tata Trusts, SDTT and Sir Ratan Tata Trust (SRTT), hold a majority stake in Tata Sons. Their stance on Chandrasekaran’s reappointment as a director will be crucial as the leadership issue moves forward.
