Tata Sons has approved a fresh five-year term for N Chandrasekaran as executive chairman, reversing his decision last month not to seek another term. The move has opened a new dispute with Tata Trusts, which has questioned the legality of the board decision.
The Tata Sons board voted 4-1 in favour of Chandrasekaran’s reappointment at its September 17 meeting. Noel N Tata, chairman of Tata Trusts and a Trusts nominee on the board, voted against the proposal.
Chandrasekaran’s current term ends on February 20, 2027. He had told the board on August 12 that he would not offer himself for another term. Tata Trusts accepted that decision and had called for a succession process to identify his replacement.
The situation changed after the Tata Sons Nomination and Remuneration Committee met on September 3. The committee asked Chandrasekaran to reconsider his decision and recommended his reappointment. He agreed to reconsider before Thursday’s board meeting, where directors approved the new five-year term by majority vote.
Tata Trusts has strongly objected to the reversal. Noel Tata said the chairman had already communicated his decision to step down and that the Trusts had accepted it. He argued that the company should now move ahead with the process of finding a successor rather than reopen the question of Chandrasekaran’s tenure.
The Trusts has also challenged the validity of Thursday’s board resolution. It described the decision as a “legal nullity”, arguing that the Tata Sons Articles of Association require the necessary support from Trusts nominee directors for the appointment or reappointment of the chairman. Noel Tata’s vote against the proposal is central to that argument.
Noel Tata also submitted a legal opinion from former Chief Justice of India D Y Chandrachud supporting the Trusts’ position, according to reports. The Trusts said the opinion was not properly considered by the board.
The dispute is significant because Tata Trusts collectively owns about 66% of Tata Sons, the holding company at the centre of the Tata Group. The next major step will be the company’s annual general meeting, where the board’s decisions will face shareholder approval.
The boardroom disagreement comes at another important moment for Tata Sons. The company has also decided to begin steps towards a possible stock market listing after the Reserve Bank of India rejected its request to surrender its registration as a Core Investment Company.
Tata Sons had sought deregistration after taking steps to meet debt-related requirements. The RBI’s decision has brought the listing requirement for an upper-layer non-banking financial company back into focus. The company said it would seek guidance from the RBI, Tata Trusts and other stakeholders on the compliance process.
The listing issue adds another layer to the disagreement between Tata Sons and Tata Trusts. A public listing would change the ownership and governance dynamics of the group’s holding company, which has stakes in major listed businesses including Tata Consultancy Services, Tata Motors and Tata Steel, besides controlling several unlisted businesses.
Chandrasekaran has led Tata Sons since 2017 and was given a second five-year term in 2022. During his tenure, the Tata Group expanded its presence in aviation, electronics, digital businesses and other emerging sectors. The group also completed the acquisition of Air India and has been pursuing major investments in manufacturing and technology.
His continuation was therefore expected to provide continuity as Tata Sons deals with regulatory requirements and large business projects. But the opposition from Tata Trusts means the question may now move beyond the boardroom.
The Trusts had already begun considering the succession process after Chandrasekaran’s August announcement. Its latest position indicates that it does not accept Thursday’s reversal as settling the matter.
The immediate focus will now shift to the Tata Sons AGM and the steps that follow. The board has backed Chandrasekaran, while Noel Tata and Tata Trusts have challenged that decision.
At the same time, Tata Sons is preparing to respond to the RBI’s position on its corporate structure and listing. The two developments together make the coming months important for the group’s leadership, governance and ownership structure.
What began as a planned leadership transition has now turned into a wider debate over chairman succession, shareholder rights and the future structure of Tata Sons. The final outcome will depend on the company’s shareholder process, regulatory requirements and how the dispute between the board and Tata Trusts develops.