Tata Sons chairman decision deferred as Natarajan Chandrasekaran third-term talks face conditions

The Tata Sons board on Tuesday put off a decision on giving Natarajan Chandrasekaran a third term as Chairman, sources said. The move suggested differences inside the holding company of the Tata Group. Sources said Noel Tata placed several conditions for the reappointment. The board did not take the proposal forward during the meeting.

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Sources said the board was discussing an extension even though Chandrasekaran’s term runs until February 2027. The discussion changed when Noel Tata raised concerns about losses at some group companies. Sources also linked the conditions to Tata Sons taking on debt. They said this could increase pressure to list the company.

Tata Sons listing concerns and RBI deadline

Sources said Noel Tata opposed any Tata Sons listing and sought a written commitment. Chandrasekaran, as per sources, said a firm promise was hard to give. Chandrasekaran cited regulation and said it must take its own course. Some board members backed Chandrasekaran on this point, sources added.

RBI rules have set a September 30, 2025 deadline for 15 entities, including Tata Sons, to list. The Tata Group has applied to surrender its core investment company registration. This step aims to avoid the listing requirement. Reports said the central bank has not yet decided on the application.

Governor Sanjay Malhotra has said an entity can continue business until registration is cancelled. Sources said the listing issue was central to the board’s debate. They also said Noel Tata worried debt could trigger conditions leading to a market listing. The talks continued for a long time at Bombay House, sources said.

Tata Sons board meeting and reappointment discussion

Sources said the reappointment item was discussed in detail and drew strong views. They said none of the other directors objected to the reappointment. The directors named by sources were Venu Srinivasan, Harish Manwani, Anita George and Saurabh Agrawal. Some directors wanted a vote, but the proposal did not proceed.

At one stage, sources said the board considered putting the reappointment to a vote. Sources added that Chandrasekaran asked for the matter to be delayed. "I recommended that it should be deferred because that was the request by one of the directors,\" Chandrasekaran told reporters while emerging from the building in the evening.

Chandrasekaran did not share details of what happened inside the meeting. Chandrasekaran said nothing changes for Tata Sons. Sources said there is no clarity on when the next board meeting will happen. They indicated it may take place after some solutions are worked out.

Tata Sons governance and ownership structure

Noel Tata chairs Tata Trusts, which owns about two-thirds of the Tata Group, sources said. Tata Trusts’ stake gives it strong influence over strategy and governance at Tata Sons. Tata Sons controls about 30 operating companies across sectors. These include consumer goods, automobiles, information technology and aviation.

Major group companies include Jaguar Land Rover, Tata Consultancy Services, Tata Motors and Air India. Tata Sons acts as the main investment holding and promoter for group firms. The structure places Tata Trusts at the centre of oversight. Tata Sons then sets direction for its operating companies.

Natarajan Chandrasekaran track record at Tata Group

Chandrasekaran joined Tata Group in 1987 and later led Tata Consultancy Services as CEO. Chandrasekaran became Tata Sons chairman in February 2017. Chandrasekaran is credited with managing a period of restructuring and consolidation. Under Chandrasekaran, the 15 largest listed Tata companies nearly doubled revenue and profits.

Chandrasekaran’s tenure included several large bets, including a semiconductor fabrication plan in India. It also included the takeover of loss-making Air India. Tata Consultancy Services also faced rapid change linked to artificial intelligence. These moves shaped the group’s portfolio and risk levels during the period.

The Tata Group began in 1868 in Mumbai under Jamsetji Nusserwanji Tata. The group remained under Tata family leadership for most of its 156-year history. In 2012, Ratan Tata stepped down and Cyrus Mistry took over. In 2016, Mistry was removed by Tata Sons after a boardroom dispute.

Ratan Tata had no direct heir and died in 2024. After that, Noel Tata was named Chairman of Tata Trusts, the main Tata Sons shareholder. Mistry died in 2022, but the Shapoorji Pallonji Group still holds 18 per cent in Tata Sons. It remains the largest minority shareholder and has pushed for listing.

The latest differences come months after issues among Tata Trusts trustees were addressed, sources said. They linked the earlier issues to disagreements that ended with Mehli Mistry’s exit. Sources also said Noel Tata’s son Neville has been preparing for induction into some trusts. The deferred decision now leaves Chandrasekaran’s reappointment unresolved for the moment.

With inputs from PTI