MUMBAI: In a fresh flare up of disagreements and potential legal battles between the owners Tata Trusts and Tata Sons, five of the six board members of the group holding company voted for a new five-year term for chairman Natarajan Chandrasekaran and also to take the company public as mandated by the Reserve Bank, both the moves strongly opposed by the trusts chairman Noel Tata who described the decisions as “illegal.”
The board of Tata Sons, which met here Thursday, approved a fresh five-year term for Chandrasekaran as the chairman, despite opposition from Noel, setting the stage for another potentially contentious battle at the shareholders meeting, which the date for which is yet to be finalized after the August 18 meeting was called off for lack of quorum.
The board also decided to take the company public as mandated by the Reserve Bank and not to challenge it legally, two sources told TNIE Thursday.
However, it has to be noted that the articles of association of Tata Sons mandates that without a unanimous backing of all board nominees from the principal trusts—the Sir Dorabji Tata Trusts (SDTT) that own close to 28% of the 66.6% that the 13 trusts collectively own in Tata Sons, and the Sir Ratan Tata Trusts (SRTT) which owns 23.57%, no decision can be taken by the Tata Sons board. Since May 2026, there is a ban on the SRTT by the charity commissioner from holding its board meeting and this was the primary reason why the August 18 annual shareholders meeting of Tata Sons was deferred for the first time in 109 years. This effectively nullifies the trusts vice-chairman Venu Srinivasan’s vote for a third term of Chandra and also backing the board call on listing. The trusts have currently only two board members—Noel and Venu though it can have one more nominee director, but for that the SRTT board has to meet.
Also, these decisions will have to be ratified by the annual shareholder meeting of Tata Sons, where the trusts can call all the shorts. If the AGM vetoes the proposals, these decisions will not be approved under the Companies Act.
Apart from Chandra, Noel and Venu, the other members of the board are Harish Manwani (a former global chief operating officer of Unilever), Anita M George (a former World Bank official) and Saurabh Agrawal, who is also the group chief financial officer of Tata Sons. The board can have nine members, of which three are to be from the trusts. Since last September, the board had only six as the third trust nominee Vijay Singh’s reappointment to the board was opposed by four of the seven trustees of the trusts.
The board decision comes barely five months after the same board had deferred a proposal to extend Chandra’s tenure after it failed to secure unanimous support as Noel opposed it. This led to Chandra on August 12, to publicly announce that he “was not available for a third term after his current chairmanship ends on February 21, 2027.”
The latest move places the question of Chandra’s continuation squarely before the shareholders. Noel, who is also a director of Tata Sons, opposed reappointment today, a source said, who also added that Noel described Venu’s votes for Chandra continuation and IPO as “illegal”.
The differences over Chandra’s continuation have been part of a broader governance tussle within the group a few months after Noel took over after Ratan Tata’s demise in October 2024. The earlier disagreements between Noel and Chandra involved concerns over capital allocation, deep losses in some of the unlisted businesses and the future structure of Tata Sons. Eight major unlisted companies together incurred losses of about Rs 33,538 crore in FY26, with Air India accounting for Rs 22,238 crore and Tata Digital reporting a loss of Rs 4,974 crore.
The board backing an IPO comes days after RBI rejected its petition to cancel its certificate of registration and asking it go public immediately. The board also decided not to take a legal recourse on listing. Meanwhile, the RBI earlier this week filed a caveat in the Bombay High Court, indicating that it wants to be heard before any order is passed as sources had said earlier this week that Tata Sons and the trusts would jointly move the HC seeking a stay or to nullify the RBI directive to take the company public.
In fact, the listing issue the most contentious issue between Noel and Chandra. While Noel and some former Tata Sons directors were opposed to the IPO, other trustees, especially vice-chairmen Venue Srinivasan and Vijay Singh were supporting. The Shapoorji Pallonji Group, which holds about 18.37% in Tata Sons, is also in favour of a listing as that will give the cash starved group the much needed liquidity as it sits over Rs 50,000 crore of high cost debt.
Now the AGM, for which the company has secured an RoC nod to hold it before December 31, has to not only clear all these decision but also approve Chandra’s reappointment as a director. This is crucial because his continuation as chairman requires him to remain a director of Tata Sons. The resolution could therefore become the next major flashpoint between the Tata Sons board and Tata Trusts and this can happen only with a unanimous votes from the trusts which have the veto power over the rest of the board decisions.
