Chandra’s reappointment still needs shareholder nod, Trusts can block it

MUMBAI: Tata Sons' board unexpectedly voted to extend N Chandrasekaran's tenure as executive chairman by another five years, disregarding Tata Trusts' opposition, which deemed the decision legally invalid, revealing a leadership and strategy rift within the conglomerate. Tata Sons announced after the meeting that Chandrasekaran acceded to reconsider his decision, marking a significant reversal by the chairman who had previously ruled out reappointment due to the lack of unanimous board support.

The board voted 4-1 in favor of extending his tenure. Noel Tata, chairman of Tata Trusts, was the sole dissenter, while Chandrasekaran abstained from voting. The deadlock among the Trusts' nominee directors left independent director Harish Manwani to cast the deciding vote, leading to the approval. Nonetheless, reappointment still necessitates shareholder approval during the next Annual General Meeting.

The board also decided to comply with the RBI's new non-banking financial company (NBFC) rules, including mandatory listing, and sought guidance from the Trusts and other stakeholders on the matter. The Trusts, however, vowed to continue searching for a successor to Chandrasekaran and explore alternative methods to circumvent a mandatory listing.

They also emphasized pushing for a selection panel to oversee a "timely leadership transition" under Tata Sons' Articles of Association.