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Tata Sons board approves 5-year extension for N Chandrasekaran; Noel Tata objects

Tata Sons board approves 5-year extension for N Chandrasekaran; Noel Tata objects

Tata Sons, Chairman N Chandrasekaran, leaves from Bombay House after Tata Sons Trust's Board meeting, in Mumbai on Aug 18. Photograph: (ANI)

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Tata Sons has approved N Chandrasekaran’s reappointment as Executive Chairman for another five-year term, while the board will seek RBI guidance on compliance requirements amid a reported dispute over the decision.

The Tata Sons board on Thursday (Sept 17) approved the reappointment of N Chandrasekaran as Executive Chairman of the Tata Group for another five-year term, following his decision to reconsider his earlier choice not to seek an extension.

The decision was taken at a board meeting on September 17, where Chandrasekaran’s reappointment was approved by a majority vote. His current term will continue until its expiry, after which he will begin a fresh five-year tenure.

“The Board thereafter resolved by a majority vote to re-appoint him as Executive Chairman for a further term of five years upon the expiry of his current tenure,” Tata Sons said in a statement.

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The board also decided to begin the process of meeting applicable Reserve Bank of India (RBI) requirements linked to the reappointment. Tata Sons said it would seek guidance from the RBI, Tata Trusts and other stakeholders on the compliance requirements.

Chandrasekaran gets second term amid internal dispute

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The board’s decision comes amid a reported disagreement within the Tata Group over Chandrasekaran’s continuation.

According to people familiar with the proceedings cited by Moneycontrol, the Tata Sons board voted 4-1 on September 17 in favour of retaining Chandrasekaran as chairman of the group’s holding company.

Noel Tata, Chairman of Tata Trusts, has opposed the decision and described the board vote as “illegal”, according to the report.

Tata Trusts is the philanthropic organisation that holds a controlling 66% stake in Tata Sons, the principal holding company of the Tata Group.

The disagreement adds a new dimension to Chandrasekaran’s reappointment, which follows months of discussions over the leadership of the group’s holding company.

Tata Sons to seek RBI guidance

The board’s resolution also focused on regulatory compliance arising from Chandrasekaran’s reappointment.

“The Board also resolved to initiate steps to comply with the applicable RBI Guidelines and will seek guidance from RBI, Tata Trusts and other stakeholders on applicable compliance requirements,” Tata Sons said.

Chandrasekaran has led the Tata Group since 2017. His continuation had previously received support from Tata Trusts. The latest board decision formally sets the stage for Chandrasekaran to continue leading Tata Sons for another five-year term, subject to the applicable regulatory and compliance requirements.

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Ajaypal Choudhary

Driven by a deep interest in international politics and geo-economics, Ajaypal Choudhary writes on and analyses a wide range of subjects from geopolitics and the global economy to ...Read More