Tata Sons Board Reappoints Chandrasekaran; Trusts Call Move Illegal
Tata Trusts, which controls 66% of the holding company, declared the board's decision a legal nullity and vowed to oppose a planned stock listing.
KEY POINTS
- Tata Sons board reappointed Chandrasekaran for five years despite his prior intent to retire.
- Tata Trusts, holding 66% stake, declared the resolution illegal and a legal nullity.
- Board also moved to initiate listing of the holding company, opposed by Trusts.
- RBI rejection of NBFC surrender application triggered the listing requirement.
- Both decisions require shareholder approval at the next AGM.
The board of Tata Sons voted on Thursday to grant Natarajan Chandrasekaran a new five-year term as executive chairman, reversing his August announcement that he would step down in February 2027. The decision passed by a majority vote after a three-hour meeting in Mumbai.
Tata Trusts, the charitable entity that owns 66% of Tata Sons, immediately denounced the reappointment as illegal. Trusts chairman Noel Tata voted against the resolution and stated that Chandrasekaran's earlier decision not to seek reappointment had achieved finality.
“That was his own decision. It was freely taken and clearly expressed. It was not sought from him by this Board.”
The board also resolved to initiate steps toward listing Tata Sons on the stock exchange, a move the Trusts warned would destroy the group's philanthropic character. Both decisions require approval at the company's upcoming annual general meeting.
The shift follows the Reserve Bank of India's rejection last week of Tata Sons' application to surrender its non-banking financial company registration. The RBI decision revives the listing prospect the company had tried to avoid by repaying over Rs 21,000 crore in debt.
Board members argued that leadership continuity would reassure prospective investors ahead of an initial public offering. Chandrasekaran, 63, has led the $180 billion conglomerate since 2017.
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