Mint ·
Economy, business and finance
Tata Trusts chairman to challenge N Chandrasekaran's 5-yr extension as Tata Sons Chairman: Report
Tata Trusts chairman Noel Tata is likely to challenge N Chandrasekaran's five-year extension as Tata Sons chairman, according to a Reuters report.
This comes amid Tata Sons' board approving N Chandrasekaran's reappointment as chairman for another five-year tenure on Thursday. The decision comes just weeks after Chandrasekaran, 63, had indicated to board members that he was not looking to continue for a third term, suggesting a change in plans amid regulatory developments concerning the group's holding company.
Noel Tata reportedly voted against extending Chandrasekaran's tenure. Tata Trusts and related entities collectively own around 66% of Tata Sons. Despite his opposition, the reappointment proposal was approved by a majority of the board.
The development also follows the Reserve Bank of India (RBI)'s decision last week to reject Tata Sons' request to give up its registration as a non-banking financial company (NBFC). The move could once again put pressure on Tata Sons to pursue a stock market listing, something the company has sought to avoid for more than a year.
As part of its efforts to prevent such a listing, Tata Sons had repaid more than ₹21,000 crore in debt.
Tata Sons board members believe retaining the current leadership could provide greater confidence to potential investors if the holding company moves towards a stock market listing, according to PTI, citing people familiar with the matter. Investors generally look for stability in the management team once a company begins preparations for an initial public offering.
The company's Nomination & Remuneration Committee is expected to formally approach Chandrasekaran and ask him to reconsider the decision to step down that he conveyed to the board in August, reported PTI. That decision was taken before the RBI's ruling and was based on expectations about Tata Sons' regulatory status that have since changed.
Noel Tata has been against a public listing of Tata Sons since at least February. His stance was reportedly among the conditions he had sought in connection with his support for Chandrasekaran's previous term extension.
The Shapoorji Pallonji Group, which owns about 18% of Tata Sons and was established by Noel Tata's father-in-law, has taken the opposite position and supports a listing of the holding company.
Chandrasekaran has been at the helm of Tata Sons since 2017, taking over after Cyrus Mistry was removed by the board, with Ratan Tata subsequently serving as interim chairman. Chandrasekaran secured another five-year term in 2022.
He informed the board in August that he planned to step down, following months of disagreements with Noel Tata over whether Tata Sons should pursue a stock market listing and how capital should be deployed across newer businesses such as Air India, Tata Digital and BigBasket, several of which have continued to incur losses.
The board had already put off a decision on Chandrasekaran's third term in February after Noel Tata voiced similar concerns during a meeting that lasted nearly three hours at Bombay House.
Garvit Bhirani is a journalist based in Gurugram. He is a Deputy Chief Content Producer at LiveMint, where he covers national and international news stories, focusing on accuracy and compelling storytelling for readers. <br><br> With a total of six years of experience in journalism, he has previously worked with Vaco Binary Semantics for Google, taking on the role of news curation lead, and reported from the field on health, education, and agriculture stories for 101reporters and News9. He has also served as a content editor for entertainment and news media organisations. <br><br> Garvit holds bachelor’s and master’s degrees in journalism and mass communication from Guru Gobind Singh Indraprastha University and Gurugram University, respectively. During college days, he joined India’s only non-profit student journalism network, where he anchored daily news updates and produced his own weekly show called ‘Data Fix’. <br><br> He was selected for the YES Foundation Media for Social Change Fellowship in Delhi, the Talking Data to the Fourth Pillar residential workshop, and the VOICE Fellowship in Pune. <br><br> He holds certificates in COVID-19-verification reporting, data journalism, food & agriculture, tech policy, media literacy and countering misinformation, and tackling election disinformation courses from Thomson Foundation, IndiaSpend, The Dialogue, US Mission in India, and AFP. <br><br> He can be reached on <a href="https://www.linkedin.com/in/garvit-bhirani">LinkedIn</a> or on <a href="https://x.com/GarvitBhirani">@garvitbhirani</a> on X