Inside Tata Sons power struggle: Why N Chandrasekaran’s third term as chairman collapsed

N Chandrasekaran, chairman of Tata Sons, decided not to seek a third term as chairman after a deadlock over extending his tenure. The Sir Dorabji Tata Trust and Sir Ratan Tata Trust had recommended extending his term by five years, but the Tata Sons board, chaired by Noel Tata, did not unanimously support the proposal. Noel Tata raised concerns over capital spending, losses at newer businesses, and whether Tata Sons could remain private.

Chandrasekaran, citing conditions for another term, deferred the decision to preserve consensus with the trusts. Noel Tata sought guarantees that Tata Sons would never list its shares and curbs on heavy capital spending in high-risk ventures. Despite Tata Sons remaining profitable, the concerns centered on the continuing funding and risks attached to newer ventures.

Chandrasekaran also could not guarantee that Tata Sons would never list due to its unsettled regulatory status, with the RBI classifying it as an upper-layer non-banking financial company. This led to a five-year extension recommended by the two main trusts remaining unapproved by the Tata Sons board, prompting Chandrasekaran to step down in 2027.