Tata Sons Chairman N Chandrasekaran’s reappointment deferred amid disagreements: Report

Tata Sons executive chairman N Chandrasekaran on Tuesday (February 24) sought the discussion on his reappointment for a third term to be deferred following disagreements over the issue at a board meeting of Tata Sons.

According to a report by the Economic Times, quoting sources, the issue of losses faced by the Tata Group in its news businesses was raised by Tata Trusts chairman Noel Tata. The report further stated that it ensued a detailed discussion at the meeting.

Board members back reappointment

However, other board members spoke in support of Chandrasekaran's reappointment and attributed the losses to greenfield investments and the gestation period needed for them to mature.

Noel Tata serves on the Tata Sons board as a nominee of Tata Trusts, alongside Venu Srinivasan.

Term timeline and retirement policy

However, Chandrasekaran’s current term is not nearing its end and will remain in office until February 2027.

The meeting was attended by all directors, including Noel Tata and vice chairman Srinivasan. Any extension of his tenure would require a special resolution and an exemption from Tata Sons’ retirement policy, which bars non-executive roles beyond 65.

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Chandrasekaran turns 63 in June. Since assuming charge as executive chairman in 2017, he has presided over a phase marked by consolidation, repair of the balance sheet and tighter capital allocation across the group, stated the report.

Noel Tata’s four conditions

It further stated that Noel Tata is learnt to have outlined four conditions that, in his view, should be met before any reappointment is approved.

The first is that Tata Sons should remain unlisted, in line with Reserve Bank of India norms applicable to so-called upper-layer shadow banks, a category that includes large conglomerates such as Tata Sons.

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The second condition is that the company carry no debt. The third calls for ensuring that reserves are not depleted by heavy capital spending on high-risk ventures.

The fourth relates to containing losses arising from acquisitions, including Air India and Big Basket.

Call for unity within Tata Group

Anita George, who heads the board’s reappointment committee, spoke in support of extending Chandrasekaran’s term, stating that losses in greenfield projects are both expected and provided for.

After some directors proposed that the matter be put to a vote, Chandrasekaran said it was better that the discussion be deferred, because an institution such as the Tata group can work only if Tata Sons and Tata Trusts are united in decision-making.