Tata Sons Pvt Ltd has approved a fresh five-year term for chairman N Chandrasekaran, reversing his decision last month not to seek reappointment, while the board has also decided to take steps towards listing the holding company in compliance with Reserve Bank of India (RBI) regulations. However, the leadership dispute at Tata Sons deepened after Tata Trusts opposed the move to reappoint Mr Chandrasekaran as chairman, with Tata Trusts chairman Noel N Tata voting against the proposal at the Tata Sons board meeting.
Tata Trusts said that the resolution seeking Mr Chandrasekaran’s reappointment is legally invalid under the articles of association (AoA) of Tata Sons. Four directors voted in favour of the proposal, while Mr Noel Tata voted against it, according to the Trusts.
The decisions to reappoint Mr Chandrasekaran and proceed with a listing were taken at a crucial board meeting on Thursday, amid ongoing differences between Tata Sons and Tata Trusts over the company's ownership structure, leadership and the question of a public listing.
According to sources familiar with the meeting, the board's nomination and remuneration committee (NRC) chairman told Mr Chandrasekaran that it had decided to offer him another five-year term. Although he had earlier said he would not offer himself for reappointment, he accepted the proposal.
The resolution was opposed by Noel Tata, chairman of Tata Trusts and a director on the Tata Sons’ board. Other board members voted in favour of Mr Chandrasekaran's reappointment, according to sources.
The development marks a sharp reversal from August, when Mr Chandrasekaran said he would step down at the end of his current term on 20 February 2027. He had cited the prolonged uncertainty over his continuation and the need for clarity on leadership while several strategic projects were at critical stages.
Confirming the development, Tata Sons, in a statement, said, "After due deliberation and in recognition of his (Mr Chandrasekaran's) contributions and the larger interests of the Tata group, the NRC unanimously resolved to request him to reconsider his decision and to recommend him for re-appointment at the next board meeting. At the meeting of the board on 17 September 2026, Chandra (Mr Chandrasekaran) acceded to the board's request to reconsider 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."
"The board also resolved to initiate steps to comply with the applicable RBI guidelines and will seek guidance from RBI, Tata Trusts and other stakeholders on applicable compliance requirements," the statement said.
Tata Sons said the process for Mr Chandrasekaran's reappointment had begun much earlier, with the Tata Trusts unanimously resolving on 28 July 2025 to recommend that he continue as executive chairman for another five years after the end of his existing term.
According to the company, the Tata Sons board subsequently agreed in principle in September 2025 to reappoint Mr Chandrasekaran for a further five years. The board decided to seek the formal approval required under applicable law in February 2026.
Tata Sons' board, however, deferred his reappointment in February following opposition from Noel Tata.
Moneylife had reported that the five-year extension had received support from the Tata Trusts trustees and the NRC, but failed to secure unanimous support at the 24 February 2026 board meeting.
The matter was discussed again at board meetings in May and June, but remained unresolved.
Against this backdrop, Mr Chandrasekaran informed the board on 12 August 2026 that he would not offer himself for reappointment when his current term ends.
The issue was revived on 3 September 2026, when the board's NRC considered his decision. After deliberations, the NRC unanimously asked Mr Chandrasekaran to reconsider his decision and recommended that he be proposed for reappointment at the next board meeting.
Tata Sons said the NRC's recommendation is based on its recognition of Mr Chandrasekaran's contribution to the group and what it described as the larger interests of the Tata group.
Tata Trusts Terms Reappointment 'Illegal'
In a statement, Tata Trusts reiterated that Mr Chandrasekaran had already decided not to seek another term after his current tenure ends on 20 February 2027. They said his decision, communicated to the Tata Sons board on 12 August 2026, was voluntary, clearly expressed and was not the result of any review or resolution by the board.
According to the Trusts, Mr Chandrasekaran’s decision was subsequently accepted and they asked Tata Sons to begin identifying his successor through a selection committee in accordance with the company's AoA.
The Trusts said their position was reiterated by Mr Tata at Thursday's board meeting after the company revisited the question of Mr Chandrasekaran's reappointment.
Trusts Question Validity of Board Resolution
The central issue raised by the Trusts concerns the provisions in Tata Sons' articles governing the appointment of its chairman.
The Trusts said the articles require a majority of their nominee directors to vote in favour of appointing a chairman. They contend that the same requirement applies to both a first appointment and the reappointment of an existing chairman.
On that basis, the Trusts argued that a resolution concerning the appointment or reappointment of the chairman cannot be validly considered unless both Trust nominee directors are present, and that both must vote in favour.
Since Mr Tata, one of the Trusts’ nominee directors, voted against the resolution, the Trusts said the proposal was a 'legal nullity' and had no valid basis under the articles.
Mr Tata also placed before the board a legal opinion obtained from former justice Dr DY Chandrachud, former chief justice of India, supporting the Trusts' position, according to the statement. The Trusts said the board did not take the opinion into account.
Trusts Say Mr Chandrasekaran Had Closed the Door on Another Term
In his detailed statement to the Tata Sons board, Mr Tata argued that the reappointment proposal should not have been brought back after Mr Chandrasekaran's 12 August 2026 communication.
Mr Chandrasekaran had written to the board that he would not offer himself for another term after the end of his current tenure. Mr Noel Tata said this was the chairman's own decision and had neither been sought by the board nor resulted from a board resolution or review process.
The communication was subsequently made public.
Noel Tata said that once the decision had been publicly communicated, it had consequences for Tata Sons and its stakeholders, including employees, lenders, counterparties, the market and the majority shareholder. “The page has turned,” he said in the statement.
The Tata Trusts collectively hold about 66% of Tata Sons' equity.
The Trusts said they formally accepted Mr Chandrasekaran's decision the following day and asked Tata Sons to constitute a Selection Committee to appoint his successor.
Mr Tata argued that bringing a reappointment resolution before the board effectively sought to reverse three developments: Mr Chandrasekaran's own decision, the Trusts' acceptance of that decision and the succession process they had asked Tata Sons to begin.
Noel Tata also raised a separate issue concerning Mr Chandrasekaran's position as a director of Tata Sons.
He argued that the question of the chairmanship was premature because Mr Chandrasekaran's continuation as a director had not yet been resolved.
According to his statement, the Tata Sons general meeting at which the issue was to be considered had been unable to proceed for want of quorum.
Mr Tata said a decision on the chairmanship before resolving the director-related question could expose Tata Sons to a legal challenge from a shareholder.
He urged the board not to expose the company to such a challenge, particularly while other significant matters involving its regulator remained pending.
Noel Tata also cautioned against linking the succession question with Tata Sons' separate regulatory issues.
He said two matters had emerged around the same time — one concerning Tata Sons' structure and its obligations to the regulator, and the other concerning the company's leadership and succession.
According to Noel Tata, the two issues should be dealt with independently. The regulatory question, he said, would depend on Tata Sons' representations to RBI, the reasons provided by the company and the time available to it. The leadership question, meanwhile, should be determined by the AoA and the prescribed succession process.
He argued that neither issue should be used as a basis for deciding the other.
Tata Trusts said they remain committed to an orderly leadership transition at Tata Sons and the wider Tata group.
Noel Tata concluded his statement by asking that it be included in the minutes of the Tata Sons board meeting and circulated to all directors along with the draft minutes.
The latest development adds another layer to the ongoing succession dispute at Tata Sons. The board's earlier attempt to resolve Mr Chandrasekaran's continuation had remained unsettled before he announced that he would not seek another term, after which the Nomination and Remuneration Committee asked him to reconsider and recommended his reappointment.
Thursday's board vote and the competing positions of the Tata Trusts and the Tata Sons board now leave the legal validity of the reappointment proposal as a central issue in the dispute.
Listing Decision Follows RBI Rejection
The other major decision before the Tata Sons’ board concerned the company's future regulatory status. The board has decided to take the necessary steps to move the company towards a public listing, following the RBI's rejection of its application to surrender its registration as a core investment company (CIC).
The central bank's 11 September 2026 decision means Tata Sons must comply with the regulatory framework applicable to upper-layer NBFCs, including the listing requirement. Tata Sons had sought to deregister as a CIC but RBI rejected the request.
The listing question has been a major point of disagreement within the Tata ecosystem. Tata Trusts collectively hold about 66% of Tata Sons, while the Shapoorji Pallonji group holds about 18.37%.
Noel Tata has opposed a move to list the holding company, while Venu Srinivasan, a Tata Trusts nominee on the Tata Sons board, has publicly supported listing if Tata Sons remains subject to the RBI's upper-layer NBFC framework. Moneylife has previously reported the differences between the two positions.
Venu Srinivasan Pushes Back
The listing issue produced another confrontation ahead of Thursday's meeting. On Wednesday, Sir Dorabji Tata Trust (SDTT) issued a circular seeking to prevent Mr Srinivasan from participating in discussions or voting on matters relating to the proposed listing of Tata Sons.
Mr Srinivasan responded that the Trust did not have the authority to prevent him from participating in the board's deliberations. He also pointed to his obligations as a director under the Companies Act and his fiduciary responsibilities towards Tata Sons.
Sources said Mr Srinivasan reiterated his position at the board meeting, including that he had already responded to the circular resolution and was required to discharge his statutory and fiduciary responsibilities as a Tata Sons director.
The episode highlights the unusual position of the two Tata Trusts nominees on the Tata Sons board. While both represent the Trusts, their positions on the listing question have diverged.
Legal Route against RBI Discussed
The board also discussed whether Tata Sons could challenge the RBI's decision in court. According to people familiar with the deliberations, a legal opinion was presented to the board regarding the company's options. The opinion was understood to suggest that Tata Sons may not have a strong legal case if it decided to challenge the RBI's decision.
That discussion assumes significance because Tata Sons had sought to avoid the listing requirement by applying to surrender its CIC registration.
RBI rejected that application on 11 September 2026 and directed Tata Sons to comply with the regulations governing upper-layer non-banking finance companies (NBFCs). The regulator subsequently filed a caveat before the Bombay High Court, a procedural step that would ensure the RBI is heard before any court considers an application relating to the matter.
The board's decision to proceed with listing, therefore, comes against a changed regulatory backdrop. The company's earlier strategy of remaining unlisted by surrendering its CIC registration has not received regulatory approval.
The two Tata Trusts' nominee seats are held by Noel Tata and Venu Srinivasan. To fulfill the requirement for a majority, they both have to vote in favour of re-appointment. Clearly, that did not happen, as Noel Tata voted against.
Despite that, the Tata Sons' Board claims to have re-appointed N. Chandraseakaran to another term as Chairman. Should Noel Tata sue, it should be an easy win, buttressed by the legal opinion he has secured from former CJI D. Y. Chandrachud.
But more importantly, the Tata Sons' Board is acting hastily and in an unethical manner, and that is unbecoming of people entrusted with such a great responsibility.
Tata is too important to India, both as a business and as a philanthropy.
Is Noel Tata competent to carry on the responsibilities that are his simply because of his name?
Does the head of such an important entity have to be a Tata or even a Parsi?