Noel Tata challenges move to reappoint Chandrasekaran at Tata Sons

Tata Trusts chairman Noel Tata has opposed N Chandrasekaran’s reappointment as Tata Sons chairman at the company’s board meeting on Thursday, arguing that Chandrasekaran’s earlier decision not to seek another term had already been accepted by the majority shareholder and that the succession process should now move forward.

In a statement presented to the board, Noel Tata said Chandrasekaran had informed the board on 12 August that he would not offer himself for reappointment after his current tenure ends on 20 February 2027.

“That was his own decision. It was freely taken and clearly expressed,” Noel Tata said, adding that it “was not sought from him by this Board, it was not the subject of any resolution of this Board, and it was not the outcome of any process of review.”

The Tata Trusts subsequently accepted Chandrasekaran’s decision and asked Tata Sons to constitute a selection committee to appoint a successor in accordance with the company’s Articles of Association.

Noel Tata said the decision had also been made public and that “the Group's employees, its lenders, its counterparties and the market have all proceeded upon it. So, has the majority shareholder. The page has turned.”

Noel Tata argued that a fresh resolution on Chandrasekaran’s reappointment would require the board to set aside his earlier decision, the Trusts’ acceptance of it and the succession process sought by the majority shareholder.

“A resolution now for re-appointment moved at this meeting would therefore ask this 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,” he said.

He also questioned whether the board could take up the chairmanship before Chandrasekaran’s position as a Tata Sons director was resolved. The general meeting at which that question was to be determined had not proceeded for want of quorum, according to his statement.

Noel Tata said a decision on the chairmanship could be “open to serious legal challenge” if it was subsequently found to have been taken while Chandrasekaran’s position as a director remained unresolved.

The Tata Trusts later described the board resolution seeking Chandrasekaran’s reappointment as a “legal nullity”. The Trusts said four directors voted in favour of the resolution while Noel Tata voted against it, and argued that the Articles of Association require a majority of the Trusts’ nominee directors to support the appointment or reappointment of a chairman.

According to the Trusts’ statement, the relevant provision applies both to the first appointment of a chairman and to the reappointment of an existing chairman. It further said both Trust nominee directors must be present when the board considers such a resolution and that both must vote in favour for it to be valid.

Noel Tata also submitted a legal opinion from Justice Dr DY Chandrachud, former Chief Justice of India, concerning the Trusts’ position. The Tata Trusts said the opinion was not taken note of by the board.

In his statement, Noel Tata said the Trusts’ acceptance of Chandrasekaran’s decision had been formally communicated and that the company should now proceed with the succession process.

“The page has turned,” he said. “It is now time to move on.”

The Tata Trusts said they remained committed to an orderly leadership transition and to appointing a successor in accordance with the Articles of Association.