Tata Sons, Trusts face off over listing, Chandrasekaran's third term

The board backed the listing proposal despite opposition from Tata Trusts chairman Noel Tata and approved another five-year term for N Chandrasekaran

A decade after the board room battle at the Bombay House between Ratan Tata and Cyrus Mistry, another stormy meeting dealing with the top leadership took centrestage at the same venue on Thursday, leading to questions on whether this could result in a legal backlash and how it may change the dynamics at the Tata group.

The much-anticipated board meeting of Tata Sons on Thursday cleared two issues with significant implications for the future of the holding company of the salt-to-software conglomerate amid a war of words and votes. One was about mandatory listing of Tata Sons and another dealing with the appointment of the company’s top leadership. While a three-hour-long board meeting cleared the listing proposal, it also approved a resolution to give a third five-year term to Chairman Natarajan Chandrasekaran — with both being opposed by Tata Trusts Chairman Noel Tata. In an unprecedented development, the resolution on the reappointment of Chandrasekaran, 63, was put to vote, resulting in a 4:1 verdict in his favour.

Chandrasekaran “acceded to the board’s request to reconsider his decision [on not offering himself for a third term as chairman of Tata Sons]”, according to a company statement. Upon completing his tenure on February 20, 2027, he will be reappointed as executive chairman for another five years, the company said.

Tata Trusts, the largest shareholder of Tata Sons with a 66 per cent stake, in a statement, called Chandrasekaran’s reappointment “illegal”, while reiterating its position that Chandrasekaran’s decision (of August 12, 2026) not to offer himself for reappointment upon the conclusion of his current tenure had been duly accepted and had attained finality. A source, however, argued that Chandrasekaran’s letter of not seeking a third term was written to Tata Sons directors (including to Noel Tata as a nominee director) and, therefore, Tata Trusts did not have a locus standi on accepting or rejecting that letter.

While Tata Sons sent out a statement after the board meeting listing out the decisions, Tata Trusts issued five statements through the evening on what transpired at the meeting on Thursday. A late evening media statement quoting Noel Tata said: “The RBI communication of September 11, 2026, declines an application for voluntary surrender of registration. On my reading, it does not say that listing is the only option. Considerable room remains, and this board should occupy that room rather than concede it.’’ He urged Tata Sons, through five-pronged steps, to engage with the RBI further to ensure it remains privately held. According to him, Tata Sons should ask the regulator for three more years, till September 2029, for any compliance measure.