Noel Tata opposes Chandrasekaran reappointment, Tata Sons listing

Tata Sons board voted 4-1 on Thursday to give N Chandrasekaran a second five-year term as executive chairman, but Tata Trusts chairman Noel Tata opposed the resolution, calling it legally invalid. The Trusts, which hold about 66% of Tata Sons, said the company's rules require both Trust-nominated directors to support the chairman's appointment. Noel Tata presented a legal opinion from former Chief Justice DY Chandrachud backing that interpretation, but the board proceeded without considering it, the Trusts said.

Separately, the Trusts rejected a board decision to move toward a potential listing of Tata Sons, which the Reserve Bank of India effectively mandated after declining the company's application to surrender its registration as a core investment company. Noel Tata argued that listing would destroy the group's character and that the RBI communication did not specify listing as the only option. He proposed making a representation to the RBI, examining restructuring options, and obtaining legal advice.

The Trusts also placed before the board a proposal from the Shapoorji Pallonji Group to sell part of its 18% stake in Tata Sons for at least Rs 25,000 crore through a buyback or capital reduction, which could provide liquidity to the SP Group without a full IPO. Governance expert Shriram Subramanian of InGovern warned the standoff could delay both Chandrasekaran's tenure and the IPO by months, and may require a shareholder vote where the Trusts' 66% holding could be decisive.