India’s Tata Sons reappoints Chandrasekaran as chairman in surprise reversal
N Chandrasekaran, Chairman, Tata Sons speaks during the foundation stone laying ceremony for India’s First AI-enabled Semiconductor Fab manufacturing facilities in Dholera, Gujarat, India, Mar 13, 2024. (Photo: REUTERS/Amit Dave)
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India’s Tata Sons reappointed N Chandrasekaran as chairman for another five years on Thursday (Sep 17), reversing his decision last month not to seek another term amid tensions with the charitable trusts that control the salt-to-aviation conglomerate.
Chandrasekaran had initially ruled out seeking another term, frustrated by what he saw as the board’s lack of support in the face of tensions with the charitable trusts. Tata Sons did not give a reason for the change.
The 158-year-old group is facing deepening losses at Air India, a sharp slump at Jaguar Land Rover and the fallout from a data breach that exposed clients including Apple and Tesla.
The reversal over Chandrasekaran also comes days after the Reserve Bank of India (RBI) rejected Tata Sons’ request to be exempted from rules that would require it to list.
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The RBI classified it as an “upper-layer” non-banking financial company (NBFC) in 2022. Companies in that category are subject to enhanced regulation and a listing requirement.
Tata Sons, which is the apex holding company of the Tata group, with stakes in Tata Consultancy Services, Tata Motors, Tata Steel, Air India and other businesses, has been trying to avoid becoming a listed company.
It repaid its external debt and applied to surrender its registration as a core investment company, arguing this would take it outside the RBI framework requiring a listing. The RBI rejected this, leaving it subject to the upper-layer NBFC rules.
At the board meeting on Thursday, the listing of Tata Sons also came up, with the chairman of Tata Trusts, Noel Tata, reading out his opposition to a public listing before the board, a source familiar with the matter told Reuters.
Chandrasekaran, 63, and Tata Trusts, which owns 66% of Tata Sons, have sparred over issues ranging from a potential Tata Sons listing and Air India’s mounting losses to the handling of a planned exit by a minority shareholder.
The source also said Noel Tata had opposed Chandrasekaran’s reappointment and was likely to challenge the decision.
Chandrasekaran, who became chairman of Tata Sons in 2017, was reappointed for a second five-year term in 2022. His current term is due to end in February 2027.
Source: Reuters/ec
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