The reappointment of N. Chandrasekaran as chairman of Tata Sons for the third term has reportedly stalled following differences of opinion at a recent board meeting on Tuesday. According to a report by The Economic Times, the matter, which was believed to be nearly settled, ran into resistance during discussions.
The disagreement is said to have emerged after questions were raised by Noel Tata, chairman of Tata Trusts.
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Concerns over losses and investments
As per the report, Noel Tata raised concerns about substantial losses arising from new ventures and acquisitions undertaken by the Tata Group in recent years. This reportedly opened the door for further deliberations within the board.
Some members argued that initial losses are common in large-scale investments and require time for stabilisation and returns. While several board members were supportive of Chandrasekaran’s reappointment, the differences over financial strategy led to the process being paused.
Noel Tata serves on the Tata Sons board as a nominee of Tata Trusts. Alongside him is Venu Srinivasan, vice chairman of Tata Trusts.
Conditions reportedly placed for reappointment
According to sources cited in the report, four key conditions were discussed in relation to Chandrasekaran’s possible continuation. These included ensuring that Tata Sons does not become a listed company, providing assurance that the organisation carries no unsustainable debt or liabilities, avoiding excessive capital expenditure in high-risk investments that could strain the treasury, and effectively managing losses from major acquisitions such as Air India and BigBasket.
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Call for consensus within the group
Anita George, head of the board’s appointments committee, was reportedly in favour of reappointing Chandrasekaran. Some board members suggested proceeding with a vote. However, Chandrasekaran himself is said to have opposed that route, emphasising on smooth functioning of the Tata Group requires alignment between Tata Trusts and Tata Sons. He reportedly requested that the discussion be postponed to maintain consensus.
Chandrasekaran’s current term runs until February 2027. However, any reappointment beyond that would require a special resolution and amendments to Tata Sons’ retirement-related rules, including changes to the age limit for non-executive roles. He is set to turn 63 in June.
