N Chandrasekaran Reappointed Tata Sons Chairman, Legal Dispute Emerges
N Chandrasekaran has secured another five-year term at Tata Sons, but Tata Trusts have challenged the validity of the board’s reappointment process.
N Chandrasekaran has been reappointed as Tata Sons chairman for another five-year term, but the decision has triggered a dispute over whether the board’s vote was sufficient to complete the process. Tata Trusts, which hold around 66% of Tata Sons, have questioned the validity of the resolution after their two nominee directors took different positions.
At the September 17 board meeting, Tata Trusts chairman Noel Tata voted against Chandrasekaran’s reappointment, while fellow Trust nominee Venu Srinivasan supported it. The disagreement was resolved through the casting vote of independent director Harish Manwani, allowing the resolution to pass. The appointment still requires formal approval at Tata Sons’ annual general meeting.
The legal issue centres on Tata Sons’ Articles of Association and the special rights of Tata Trusts’ nominee directors. A legal opinion obtained by the Trusts from former Chief Justice of India D Y Chandrachud reportedly says that a majority of the Trusts’ nominee directors must support the reappointment and that a chairman’s casting vote cannot override this requirement. The opinion is not a court ruling, so it does not itself invalidate the board resolution.
The dispute comes amid a broader disagreement over Tata Sons’ ownership structure and potential listing. The board has moved towards a listing following the RBI’s rejection of Tata Sons’ request to surrender its registration, while Noel Tata has opposed listing and called for other options to be examined.
The SP Group, which owns roughly 18% of Tata Sons, has backed listing and has separately proposed a transaction that could provide it with at least Rs 25,000 crore in liquidity.
For now, Chandrasekaran has board approval for another five-year term, but the Trusts’ legal objections leave questions over the process and its final status.
