Tata Sons board defers N Chandrasekaran's reappointment discussion after Noel Tata flags issues

Tata Sons N Chandrasekaran’s current term runs until February 2027

• Tata Sons delayed decision on Chandrasekaran's third term
• Noel Tata raised concerns over losses and capital deployment pace
• Board agreed to defer vote, seeking alignment with Tata Trusts

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The process of reappointing Tata Sons chairman N Chandrasekaran for a third term, beginning in February 2027, did not move forward on Tuesday after Tata Trusts chairman Noel Tata raised concerns during a Tata Sons board meeting, people aware of the discussions said.

According to the people cited, the question of initiating Chandrasekaran’s renewal came up during Tuesday’s board discussion, but it did not move forward after Tata raised concerns about losses in some of the group’s newer businesses and the pace of capital deployment. The discussion broadened into a review of performance, capital allocation and governance, and the matter was deferred rather than put to a vote, the people said, requesting anonymity.

The deferment of the decision to reappoint Chandrasekaran was first reported on The Economic Times website.

N Chandrasekaran says he recommended deferment of decision on extension

A person familiar with the developments told Moneycontrol that in the run-up to the February 24 board meeting, Noel Tata reached out to several trustees to explore whether they would reconsider an earlier unanimous decision by the trusts backing Chandrasekaran’s reappointment.

However, it is understood that some trustees were unwilling to convene to discuss the matter ahead of the Tata Sons meeting.

Notably, Tata Trusts had unanimously agreed in an internal resolution last year to support Chandrasekaran’s continuation, according to sources familiar with the matter.

The people cited above said Trust nominee director Venu Srinivasan and independent director Anita George supported moving ahead with Chandrasekaran's reappointment at the Tata Sons meeting on Tuesday. They said that losses in the newer ventures should not be a cause for concern, as they were long-term investments.

However, Noel Tata is understood to have indicated that certain expectations would need to be addressed before the Trusts would be comfortable backing another term. These included keeping Tata Sons unlisted, maintaining balance sheet discipline, tightening oversight of high-risk capital expenditure and containing losses from acquisitions such as Air India and BigBasket, the people said.

Chandrasekaran’s current term runs until February 2027, and the people aware of Tuesday’s discussions said he agreed that the matter should be deferred rather than pushed to a vote, given the importance of alignment between Tata Sons and the Trusts.

All board members attended the meeting, the people said.

They also said Noel Tata’s son, Neville Tata, was present at Bombay House, the Tata Group’s headquarters in Mumbai, on Tuesday, though he is not a member of the Tata Sons board. Neville is on the board of the Sir Dorabji Tata Trust.

Moneycontrol has reached out to Tata Trusts, Tata Sons and  Noel Tata for comment. Their responses are awaited, and the story will be updated as and when they respond.

The development comes some months after the exits of long-time trustees Mehli Mistry and Pramit Jhaveri and at a time when several decisions regarding the composition of the trusts are being considered, according to people familiar with internal deliberations.