Mumbai: Tata Trusts has declared the Tata Sons board resolution seeking to reappoint N Chandrasekaran as chairman illegal, opening a leadership battle at India’s conglomerate.
The Trusts said Chandrasekaran’s decision not to seek another term after his tenure ends on February 20, 2027, had been accepted and could not be reversed.
Earlier reports claimed the Tata Sons board had supported a five-year term for Chandrasekaran and approved the company’s long-pending listing plan.
Decision had attained finality
According to the statement, Chandrasekaran informed the Tata Sons board on August 12 that he would not offer himself for reappointment. Tata Trusts described it as a voluntary decision, rather than the outcome of any review.
The Trusts said the announcement was made public without prior consultation with shareholders. Once communicated, the decision carried consequences because employees, lenders, counterparties, the market and the majority shareholder had acted on it.
Tata Trusts accepted his decision the next day and advised Tata Sons to constitute a selection committee to identify a successor under the company’s Articles of Association.
Why resolution is disputed?
At Thursday’s board meeting, four directors supported Chandrasekaran’s reappointment, while Noel Tata voted against it.
Tata Trusts argued that the board cannot discuss or approve the chairman’s appointment or reappointment unless both Trust nominee directors are present and vote in favour.
Since Noel Tata, one of the nominee directors, opposed the proposal, the Trusts said the resolution became legally void and had no basis. He also placed before the board a legal opinion from former Chief Justice of India DY Chandrachud supporting the Trusts’ position.
Listing pressure grows
The confrontation comes amid pressure over Tata Sons’ proposed listing. The Reserve Bank of India classified the company as an upper-layer non-banking financial company in 2022, bringing it under mandatory listing requirements.
Reports said the RBI recently rejected efforts to avoid that obligation and directed Tata Sons to proceed with the listing, deepening uncertainty.
