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Tata Sons leadership row intensifies after Tata Trusts challenge Chandrasekaran reappointment (Image: Google)
Mumbai: A fresh dispute has emerged within the Tata Group after Tata Trusts on Thursday stated that the resolution passed to reappoint N Chandrasekaran as Chairman of Tata Sons was “illegal” and without legal validity.
The development came after reports suggested that the Tata Sons board had approved another five-year term for Chandrasekaran and also cleared the company’s long-pending listing plans.
In a statement, Tata Trusts said Chandrasekaran had informed the Tata Sons Board on August 12 about his decision not to seek reappointment after completing his current term on February 20, 2027. According to the Trusts, the decision was voluntarily made and was not part of any review process.
The Trusts said the decision was later accepted by them and communicated to Tata Sons to begin the process of forming a Selection Committee for appointing a successor.
Tata Trusts stated that their position remains unchanged as a decision taken by the majority shareholder. The Trusts said the resolution seeking Chandrasekaran’s reappointment during the board meeting was not legally valid due to provisions under Tata Sons’ Articles of Association. The statement claimed that four directors voted in favour of the proposal, while Tata Trust nominee director Noel Tata voted against it.
Tata Trusts argued that Tata Sons cannot legally conduct a meeting or approve a chairman appointment resolution unless both nominee directors of the Trusts are present. The Trusts further stated that such a resolution requires support from both nominee directors to become valid.
According to the statement, Noel Tata also submitted a legal opinion from former Chief Justice of India Justice Dr DY Chandrachud regarding the Trusts’ position.
The latest disagreement comes after regulatory developments involving Tata Sons. The Reserve Bank of India (RBI) had classified Tata Sons as an upper-layer non-banking financial company in 2022 and required it to comply with listing requirements within three years.
The company’s possible listing has remained a key issue, with reports suggesting that the Tata Sons board had recently discussed plans related to the matter.
The dispute over Chandrasekaran’s continuation as Chairman has brought renewed attention to governance issues at Tata Sons. N Chandrasekaran, who took charge as Tata Sons Chairman in 2017, currently leads one of India’s largest business groups with operations across technology, automobiles, steel, consumer products and other sectors.
