Even Tata family didn’t have their way in Tata Sons:Noel’s veto rejected; Chandrasekaran re-elected as Chairman

The boardroom battle within the Tata Group, one of the country’s largest business conglomerates, has come out into the open. On Thursday, the Tata Sons board took two major decisions at a meeting that lasted three hours. First, it approved the reappointment of N. Chandrasekaran as executive chairman for a third five-year term. Second, it decided to begin the process of listing Tata Sons on the stock market. However, Tata Trusts, which holds a 66% stake in Tata Sons, has declared the decision legally invalid. In a statement, the trusts said four directors on the board supported Chandrasekaran’s reappointment, while Noel Tata, Ratan Tata’s half-brother, opposed it. Despite this, Tata Trusts does not consider the four-to-one majority sufficient. Therefore, it does not accept the appointment. How the entire matter turned around in a month Chandrasekaran, 63, has a term that runs until 20 February 2027. He said on 12 August that he would not take up another term, but on 3 September, the nominations committee urged him to reconsider. Chandrasekaran agreed on Thursday. Voting tied at 1-1 When a proposal for Chandrasekaran’s reappointment was tabled at Tata Sons’ board meeting on Thursday, the two Tata Trusts nominee directors found themselves on opposite sides. Noel Tata voted against the proposal, while Venu Srinivasan voted in favour. This left the contest between the nominee directors tied at 1-1. According to a director present at the meeting, the company secretary presented a legal opinion stating that, in the event of a tie, the chairman could cast the deciding vote. Chandrasekharan then cast the deciding vote in favour of his own reappointment, and the resolution was passed. Noel objected and presented the legal opinion of former Chief Justice of India D.Y. Chandrachud, but Tata Trusts claims that the board did not accept it. The dispute centres on Article 121A: Noel’s objection was based on Article 121A of Tata Sons’ Articles of Association. It states that the reappointment of the chairman requires the support of a majority of the nominee directors. With Noel voting against the proposal, this condition was not met and the resolution became “legally void”. The trusts argue that this specific requirement cannot be fulfilled through the chairman’s casting vote. What next? Is AGM crucial? The board’s decision is not the final stage. Shareholders’ approval will now be sought at the general body meeting. Tata Trusts is in a strong position there because of its 66% stake. A fresh dispute could therefore emerge at the meeting. The decision could also face a legal challenge. Why Chandrasekaran is important for Tata Group For the first time, a tenure in the group has been extended beyond the retirement age For the first time at the Tata Group, a group executive will remain in office beyond the prescribed retirement age of 65. Under the Tata Group’s policy, executives generally retire at the age of 65. However, they can remain in non-executive positions until the age of 70. Chandrasekaran is currently 63 years old. His new term will end in 2032, when he will be 70. He first joined the Tata Sons board in October 2016 and was appointed chairman in January 2017. He began his career as an intern at TCS in 1987. Wrote on 12 August: I am resigning because of opposition from one member Chandrasekaran resigned from the post on 12 August. During this period, he wrote an emotional post. He said, “My current term as chairman of Tata Sons ends on 20 February 2027. The Sir Dorabji Tata Trust and the Sir Ratan Tata Trust unanimously passed a resolution recommending the extension of my term for a further five years. This was recorded by the Tata Sons Nomination and Remuneration Committee and the board, which recommended taking it forward. The proposal was subsequently placed before the Tata Sons board on 24 February 2026. However, the proposal could not move forward because one of the board members did not support it. As it did not receive unanimous backing, I chose to defer the decision. Six months have passed since that board meeting, and no decision has been taken to date. Tata Sons is a very large institution, and several major strategic projects are at a crucial stage. To lead the group after February 2027, it is essential not only to have a leader in place, but also to provide clarity on the leadership to employees, investors, partners and other stakeholders.” Know the difference between the Tata Group, Tata Sons and the Tata Trusts Tata Group: The Tata Group comprises various companies and businesses operating under the Tata name, such as TCS, Tata Motors, Tata Steel, Tata Power and Air India. Tata Sons: Tata Sons is the holding company of the Tata Group. It holds stakes in the group’s major companies and plays an important role in key decisions. Tata Trusts: Tata Trusts is a group of trusts involved in social and philanthropic work. It holds around 66% of Tata Sons.