Tata Trusts vs Tata Sons board: Noel Tata terms Chandrasekaran reappointment illegal

Tata Sons' board on Thursday approved the reappointment of N Chandrasekaran as executive chairman for another five years, setting the stage for a fresh tussle with Tata Trusts, the conglomerate's majority shareholder.

The U-turn follows the Reserve Bank of India's rejection of Tata Sons' application to surrender its registration as a non-banking financial company.

The central bank’s decision has revived the prospect of a stock listing the company had spent more than a year trying to avoid, including by repaying more than ₹21,000 crore in debt.

The board said Chandrasekaran, who has led the Tata Group since 2017, agreed to reconsider his decision not to seek another term after the company's Nomination and Remuneration Committee unanimously requested him to do so.

However, Tata Trusts Chairman Noel N Tata opposed the move at the board meeting and maintained that the resolution was legally invalid.

Noel Tata has opposed a listing since at least February, when the position was reportedly among the conditions he attached to backing Chandrasekaran's previous term renewal.

Shapoorji Pallonji Group, which holds roughly 18% of Tata Sons and was founded by Noel Tata's father-in-law, has favoured a listing.

According to Tata Sons, the Trusts had in July 2025 passed a unanimous resolution appreciating Chandrasekaran's stewardship and resolving that he be reappointed for another five-year term.

The Tata Sons board had also agreed in principle in September 2025 to his reappointment.

However, when formal approval was sought in February 2026, the resolution was deferred after the board failed to reach unanimity.

The matter was discussed again at board meetings in May and June but remained unresolved, Tata Sons said.

On August 12, Chandrasekaran opted not to offer himself for reappointment.

The Trusts said they accepted his decision the following day and asked Tata Sons to begin the process of constituting a selection committee to appoint his successor.

The Nomination and Remuneration Committee, however, at a September 3 meeting, unanimously decided to ask Chandrasekaran to reconsider his decision and recommend his reappointment, citing his contribution and the larger interests of the Tata Group.

Chandrasekaran agreed to reconsider the decision at Thursday's board meeting, following which the board approved his reappointment by majority vote.

The board also decided to initiate steps to comply with applicable Reserve Bank of India guidelines and seek guidance from the RBI, Tata Trusts and other stakeholders on compliance requirements.

Tata Trusts, which holds around 66% of Tata Sons, said Noel Tata reiterated the Trusts' position at Thursday's meeting that Chandrasekaran's August 12 decision had attained finality.

The Trusts said their nominee directors' approval was required under the Articles of Association for appointing or reappointing the chairman.

Noel Tata voted against the reappointment resolution, while four directors voted in favour, according to the Trusts.

"The resolution seeking to reappoint Mr N. Chandrasekaran ... was a legal nullity," Tata Trusts said, citing the provisions of Tata Sons' Articles of Association.

Noel Tata also submitted a legal opinion obtained from former Chief Justice of India Justice D Y Chandrachud supporting the Trusts' position, according to the statement.

Tata Trusts said the board should instead proceed with setting up a selection committee for appointing Chandrasekaran's successor.

In his statement to the board, Noel Tata also argued that Chandrasekaran's reappointment was premature because his position as a director of Tata Sons remained uncertain, as a general meeting on the matter has been unable to proceed for want of quorum.

“Until that question is resolved, a resolution upon the chairmanship rests upon a foundation which has not yet been laid,” Noel Tata said. “We cannot put the cart before the horse.”

Chandrasekaran, 62, took charge as chairman of Tata Sons in 2017, succeeding Cyrus Mistry. He was reappointed for a second five-year term in 2022.