The chairman of Tata Sons intends to step down when his term ends in February 2027 after helming the conglomerate for more than a decade, pushing throwing the group – which controls more than 30 companies, including IT firm TCS, Tata Motors and Air India — into uncertainty at a time when it’s spearheading the country’s push into high-tech sectors.
Mr. Natarajan Chandrasekaran or Chandra, as he’s widely known, said on Wednesday (Aug 12) the decision followed months of deadlock over his reappointment triggered by a single director withholding support for extending his tenure.
The development comes ahead of Tata Sons’ annual general meeting scheduled for Aug 18, with questions over whether the holding company had the necessary quorum to hold the meeting. Shareholders were set to vote on Mr. Chandrasekaran’s reappointment as director – a legal requirement for him to continue as chairman.
Mr. Chandra said the Tata Sons board had unanimously recommended a five-year extension proposed by the Sir Dorabji Tata Trust and Sir Ratan Tata Trust. But when the resolution was tabled at a Feb 24 board meeting, one director declined to back it.
Mr. Noel Tata, chairman of Tata Trusts – which in turn controls Tata Sons – is the director referred to in Chandra’s statement, a person familiar with the matter said.
“No resolution has been reached till date,” Mr. Chandra said in the statement, adding that the group needs clarity on leadership as several strategic projects are at “critical stages of execution.”
The leadership uncertainty clouds the outlook for Tata Sons, the holding company of India’s oldest conglomerate, as it pushes into capital-intensive ventures including a multibillion-dollar plan to manufacture semiconductor chips. The group is also engaged in talks with India’s central bank over how Tata Sons can remain privately held despite being classified as a non-banking finance company.
Shares of Tata Group companies dropped in Mumbai trading, with the conglomerate’s biggest company Tata Consultancy Services’ stock extending a fall to as much as 5.1 per cent
Mr. Noel Tata’s opposition to the extension centred around his demands that Chandra curb debt, avoid a public listing of Tata Sons and resolve issues with the Shapoorji Pallonji Group. That prompted Mr. Chandra to recommend, in February, delaying the decision on his reappointment to maintain consensus with Tata Trusts. BLOOMBERG
