ET Exclusive: Tata Sons chairman N Chandrasekaran’s reappointment deferred

Mumbai: Tata Sons executive chairman N Chandrasekaran asked for a deferment of the discussion on his reappointment for a third term, after disagreements broke out in the board meeting of Tata Sons on Tuesday, people familiar with the matter said.

During the board meeting, Tata Trusts chairman Noel Tata raised the issue of losses made by the Tata Group’s new businesses, leading to a detailed discussion on the matter. The other board members supported Chandrasekaran's reappointment, attributing the losses to these being greenfield investments and the gestation period needed for them to mature.

Noel Tata is a Tata Trusts nominee on the board of Tata Sons, along with Venu Srinivasan. Chandrasekaran’s current term does not expire immediately; he has a year until February 2027 in the role. The meeting was attended by all board members, including Tata Trusts chairman Noel Tata and vice chairman Srinivasan.


The reappointment requires a special resolution and entails an exception to Tata Sons’ retirement policy for non-executive roles beyond the age of 65. Chandrasekaran turns 63 in June.

Having taken over as executive chairman in 2017, Chandrasekaran has overseen a period of consolidation, balancesheet repair and renewed capital allocation discipline at the group.

Tata Trusts chairman Noel Tata is understood to have put forth four conditions on which the Tata Sons chairman needs to deliver before a reappointment should be granted. One is that Tata Sons should not be listed, in accordance with the Reserve Bank of India guidelines for the so-called upper-layer shadow banks. Large conglomerates such as Tata Sons falls under the definition.

Second is that the chairman should ensure there’s no debt in the company. Third is that he has to make sure the company’s coffers are not emptied due to excessive capital expenditure in high-risk investments. And the fourth is that losses stemming from acquisitions such as Air India and Big Basket should be contained.

Anita George, head of the board’s reappointment committee, spoke in favour of the reappointment, saying the losses in green field projects are both expected and provided for.

Subsequent to this, while board members suggested the matter be put to vote, Chandra said it is better that this discussion is deferred, because an institution such as the Tata group can work only if Tata Sons and Tata Trusts are united in decision making.

This is a developing story. Updates will be incorporated on an ongoing basis.