Mumbai (India) (AFP) – India’s Tata Sons said Thursday its board had voted to reappoint N. Chandrasekaran as executive chairman for another five-year term after he rescinded his decision last month to not seek another term. But Tata Trusts, a group of philanthropic institutions that owns 66 percent of Tata Sons, said separately that Chandrasekaran’s appointment was “illegal”, potentially triggering another crisis in one of India’s most storied family firms.
The Tata Group has grappled with a leadership crisis for about a year due to boardroom disagreements over several issues, including losses at some group firms. Tata Sons is the principal holding company and promoter of the Tata Group, a vast conglomerate whose interests range from salt to software. In 2024-2025, the revenue of Tata companies was more than $180 billion, and the companies collectively employ over one million people.
The Tata Sons board meeting came a month after Chandrasekaran said he would not seek reappointment following months of friction with Tata Trusts chairman Noel Tata. But the board’s nomination and remuneration committee asked Chandrasekaran to reconsider, Tata Sons said in a statement, citing his “contributions” to the Tata Group and its “larger interests”. Chandrasekaran “acceded to the board’s request” to reconsider his decision, Tata Sons said.
Tata Trusts said the board’s decision to reappoint him despite Noel Tata — one of the directors — voting against it was a “legal nullity” under Tata Sons’ articles of association. The Trusts said they had accepted Chandrasekaran’s decision to step down when his term ends in February 2027 and had already called for the creation of a selection committee to choose his successor.
While Tata Trusts does not play a role in the day-to-day management of the conglomerate, their shareholding in the parent firm gives them decisive influence over the group’s future. Several of the group’s key businesses, such as Tata Consultancy Services, have been facing major global headwinds. Other costly bets, including the acquisition of Air India in 2022 and the decision to invest billions into semiconductor manufacturing, have yet to pay off.
India’s central bank wants Tata Sons to list publicly, an outcome that would offer shareholders of group firms greater transparency into the conglomerate’s workings. But the listing would “reduce the influence” of Tata Trusts on the group, according to Shriram Subramanian of InGovern Research, a shareholder advisory firm. Tata Sons had sought an exemption from the listing requirement, but the Reserve Bank of India rejected its request last week.
An IPO by the Tata Sons, if it happens, could be one of the largest ever in India.
© 2024 AFP
