Mumbai, Sept. 17 -- Over a month after he said that he will step down as chairman of Tata Sons, the Board on Thursday backed N Chandrasekaran at the helm for another term of five years, the company said.
However, the decision has been contested by Noel Tara, Chairman of the Tata Trusts, which controls 66 per cent stake in the group.
The company's board met on Thursday for the first time since Chandrasekaran made his decision to quit public and said he agreed to the "Board's request to re-consider his decision".
"At the meeting of the Board on September 17, Chandra acceded to the Board's request to re-consider his decision. The Board thereafter resolved by a majority vote to re-appoint him as Executive Chairman for a further term of five years upon the expiry of his current tenure," Tata Sons said.
"In September 2025 the Board of Tata Sons agreed in principle to re-appoint Chandra as Executive Chairman for a further term of five years. Pursuant to applicable provisions of law, the Board decided to obtain the relevant formal approval in February 2026," Tata Sons said in a statement.
In February 2026, in the absence of unanimity, the resolution was deferred. In subsequent Board meetings in May and June, this matter was discussed but not resolved.
"In view of the above, on August 12, Chandra opted not to offer himself for re-appointment upon the expiry of his current term," Tata Sons said.
Current developments in Tata Sons have witnessed its most explosive boardroom crisis since the ouster of Cyrus Mistry nearly a decade ago.
The nearly three-hour meeting produced duelling statements, a disputed vote count, and a legal opinion from a former Chief Justice of India, leaving India's largest business house with two rival claims over who legitimately leads it.
Chandrasekaran, 63, had told the board last month he would not seek another term when his tenure ends on February 20, 2027, after the board repeatedly failed to reach unanimity on renewing his position.
That changed after the Reserve Bank of India rejected Tata Sons' bid to avoid a stock-market listing - a shift that led directors to lean on Chandrasekaran's continuity to reassure investors ahead of any listing process. Nevertheless, Trusts has asked Tata Sons to explore options other than listing on the stock market. While many of the Tata companies are listed on the share market, the holding company remains private. Noel Tata argued that under the guidance of the late Ratan Tata, the board had in March 2024 unanimously resolved to keep the holding company unlisted.
He stated that the Tata Group was conceived as a national service carried on through business for over a century. If listed, he claimed, it will destroy the Tata Sons' character.
"That is not sentiment. It is the operating model of this House, and it has stood the test of time for more than a century. A listing will destroy its character and strike at the heart of this principle," Noel Tata noted.
Tata Trusts rejected the outcome outright, branding the resolution a "legal nullity". The Trusts said Chandrasekaran's original decision to step aside "has been duly accepted and has attained finality" and that they had already directed Tata Sons to set up a selection committee for a successor.
Citing the company's Articles of Association, the Trusts argued that chairmanship resolutions require both Trust-nominated directors to vote in favour and since Noel Tata dissented, the vote "was rendered legally void and without any basis."
The Trusts disclosed that Noel Tata had submitted a legal opinion from former Chief Justice of India DY Chandrachud backing their position, which "was not taken note of by the Board". In a pointed statement to directors, Noel Tata argued the reappointment vote asked the board "to set aside three things at once: the Chairman's own stated decision, the acceptance of that decision by the majority shareholder, and the further process which that shareholder has asked this company to set in motion."
The clash revives memories of Tata Sons' last great boardroom war - the 2016 ouster of Cyrus Mistry as chairman, orchestrated by Ratan Tata and the Tata Trusts, which triggered years of litigation ending only when the Supreme Court upheld the Trusts' authority in 2021. Neither side indicated any legal filing had been made as of Thursday, but with Tata Sons treating Chandrasekaran as reappointed and the Trusts treating the vote as void, the dispute looks set for a reckoning - potentially at the company's annual general meeting, which must ratify the appointment, or in court. An eventual Tata Sons listing could rank among India's largest IPOs, with the conglomerate's valuation estimated near USD 230 billion.
Published by HT Digital Content Services with permission from Millennium Post.