N Chandrasekaran reappointed Tata Sons chair, but third term may not be final yet

N Chandrasekaran has been reappointed as Tata Sons chairman for another five-year term, but questions remain over whether the board's vote was enough to complete his reappointment. The issue stems from a disagreement between Tata Trusts' two nominee directors.

Tata Trusts and its affiliated trusts hold around 66% of Tata Sons' equity and have two nominee directors on the company's board, which are Tata Trusts chairman Noel Tata and Venu Srinivasan.

At Thursday's meeting, Noel Tata voted against Chandrasekaran's reappointment, while the other Trusts nominee, Venu Srinivasan, voted in favour.

With the two Trusts nominees voting differently, the board vote ended in a tie. Independent director Harish Manwani, who was chairing the meeting, then used his casting vote in favour of Chandrasekaran, and the resolution was passed.

The legal question centres on whether the Trusts' nominees needed to separately meet a voting requirement for the reappointment.

According to The Times of India, a legal opinion obtained by Tata Trusts from former Chief Justice of India D Y Chandrachud says that a majority of the Trusts' nominee directors (Noel Tata and Venu Srinivasan) must support the appointment. The opinion also says Manwani's casting vote cannot override that requirement.

The opinion is not a court ruling and does not invalidate Chandrasekaran's reappointment. It gives Tata Trusts a legal basis to question whether the board's resolution was sufficient to complete the process.

WHY THE TATA TRUSTS' ROLE MATTERS

The starting point is Tata Sons' unusual ownership structure.

The Tata Trusts and affiliated trusts together hold around 66% of the equity of Tata Sons. The Trusts are therefore the company's majority shareholders and have two nominee directors on the board. Noel Tata is one of those nominee directors.

But the fact that the Trusts hold a majority of the shares does not, by itself, mean that Noel Tata can simply overturn a board decision.

The important question is different: what voting rights do the Trusts' nominee directors have under the Articles of Association of Tata Sons, and what happens when those two nominee directors do not agree?

That is the point at the heart of the current dispute.

On Thursday, Noel Tata voted against Chandrasekaran's reappointment. Venu Srinivasan voted in favour. With the two nominee directors split, Manwani's casting vote was used to break the deadlock and the resolution went through.

The legal opinion cited by Tata Trusts reportedly takes the view that this is not enough because the requirement for support from a majority of the Trusts' nominee directors is separate from the general voting process of the board.

In simple terms, the question is whether the board can say that the resolution passed because the overall vote, including the casting vote, was in favour, or whether it first needs the required level of support from the Trusts' nominee directors.

That distinction could determine whether Chandrasekaran's third term is fully settled.

WHAT EXACTLY HAPPENED AT THE BOARD MEETING

The board's decision came after months of uncertainty over Chandrasekaran's continuation.

At Thursday's meeting, the reappointment resolution was put to a vote. Noel Tata opposed it, while Venu Srinivasan supported it.

The disagreement among the Trusts nominees meant the board faced a deadlock. Manwani, as the director chairing the meeting, then exercised his casting vote.

The resolution was consequently approved.

But the subsequent legal question is whether a casting vote can resolve only a tie in the board's overall voting process, or whether it can also overcome a separate requirement relating to the Trusts' nominee directors.

According to the report, Chandrachud's legal opinion says these are two different things. The opinion reportedly holds that the affirmative vote of a majority of the Trusts' nominee directors is an independent requirement, while the casting vote is meant to resolve a tie among the directors more generally.

This is why the board's approval does not necessarily end the matter.

WHAT HAS NOEL TATA SAID ABOUT CHANDRASEKARAN?

Noel Tata's detailed statement to the Tata Sons board does not itself set out the legal argument that Chandrasekaran's reappointment is invalid. His statement is largely focused on the process followed by Tata Sons and, in particular, the dispute over whether the company should remain unlisted.

However, it does provide important context on his position towards Chandrasekaran and the company's future.

Noel said that at a February 2026 board discussion on Chandrasekaran's reappointment, he had asked Chandrasekaran to state his personal determination and desire to keep Tata Sons private. He also asked whether all necessary steps had been taken to ensure that outcome.

According to Noel's statement, Chandrasekaran reiterated that all necessary steps had been taken. Noel said he accepted that assurance but wanted a full briefing on the options explored, the company's engagement with the regulator and the possible way forward. He also said Tata Sons and the Trusts should arrive at their position together.

This is significant because keeping Tata Sons unlisted has been one of the central areas of disagreement between the company and the Trusts.

THE BIGGER TATA SONS LISTING DISPUTE

The question over Chandrasekaran's reappointment comes against the backdrop of a much larger dispute over the future structure of Tata Sons.

The Tata Sons board had unanimously decided in March 2024 that the company should remain unlisted. As part of that decision, the company applied to the Reserve Bank of India to voluntarily surrender its certificate of registration. Noel's statement says the resolution has never subsequently been placed before the board for reconsideration. No director, he said, had moved a proposal to revisit it.

The Tata Trusts separately reiterated their position in 2025.

In May 2025, the trustees of the Sir Dorabji Tata Trust and Sir Ratan Tata Trust unanimously agreed that listing Tata Sons would have far-reaching implications. In July, both Trusts unanimously resolved that Tata Sons should remain unlisted and asked the chairman to explore all avenues and engage with the RBI.

Noel has maintained that this position has not changed.

The Tata Trusts' argument goes beyond simply wanting Tata Sons to remain private. The Trusts say the existing structure, under which they own the majority of Tata Sons and dividends from operating companies ultimately support charitable activities, is central to the Tata model.

In his statement, Noel said the structure has allowed Tata Sons to take decisions that may not always be justified by a narrow commercial calculation. He pointed to the group's long-term investments and commitments, including areas such as semiconductors, electronics and civil aviation.

He argued that a listed holding company would have to answer to institutional and other shareholders whose primary legitimate interest would be financial returns. According to Noel, that could affect the ability of Tata Sons to support distressed businesses or undertake long-gestation projects.

In a separate Tata Trusts statement, Noel said a listing would change the character of Tata Sons and affect the principle on which the group had operated for more than a century.

WHY THE RBI DECISION HAS MADE THE ISSUE MORE URGENT

The listing dispute became more complicated after the RBI's latest decision.

Tata Sons had sought to voluntarily surrender its certificate of registration in March 2024. The RBI's communication of September 11 said the request could not be accepted and advised Tata Sons to comply with the regulations applicable to an upper-layer NBFC.

Noel, however, pointed out that the communication did not itself mention listing and did not prescribe a particular step that Tata Sons must take.

He has therefore argued that the company should examine all legally permissible alternatives before moving towards a public listing. His statement calls for a detailed examination of options, legal advice and further engagement with the regulator.

For the Trusts, this makes their involvement in any structural decision particularly important.

Noel said the Trusts should be involved before a structural step towards listing is taken, before advisers are appointed and before decisions on the structure or timing of any such transaction are made.

He also said that if the question of listing were to come back to the board, it should first be considered by the Trusts in their capacity as the majority shareholder.

SP GROUP'S RS 25,000 CRORE PROPOSAL

At the same September 17 board meeting, Noel also tabled a separate proposal from the Shapoorji Pallonji Group that could provide liquidity to the SP Group without Tata Sons itself necessarily going for an immediate public listing.

The proposal involves monetising a portion of the Tata Sons shares held by Sterling Investments Corporation Pvt Ltd and Cyrus Investments Pvt Ltd, two investment companies of the SP Group.

The proposal envisages selling enough Tata Sons shares to generate at least Rs 25,000 crore, based on the minimum valuation determined under Rule 11UA of the Income Tax Rules. The transaction would be structured in two tranches over 18 months. It would also involve Tata Sons initiating a selective capital reduction through the NCLT.

Noel proposed that the liquidity requirement could be supported through a combination of Tata Sons' internal cash flows, sale of listed shares, bringing investors into newer businesses and potentially listing some businesses through an offer for sale.

The proposal is important in the current context because it offers another possible route to address the SP Group's liquidity needs. But it remains a proposal placed before the board and does not mean that Tata Sons has approved a transaction or decided to list the holding company.

Chandrasekaran's third term is therefore getting caught up in two separate but connected questions.

The first is whether the board's voting process was sufficient to approve his reappointment.

The second is the larger disagreement between Tata Trusts and the Tata Sons board over the company's future structure, including the question of listing and the role of the Trusts in such decisions.

The Noel Tata statement shows that the Trusts want to be involved before major structural decisions are taken. It also records Noel's earlier questions to Chandrasekaran over his commitment to keeping Tata Sons private.

At the same time, the legal opinion reported by the Times of India brings the nominee-director voting mechanism directly into the reappointment question.

That is why Thursday's board vote does not necessarily close the matter.

There are now likely to be questions over the legal validity and effectiveness of the board resolution, particularly around the rights of the Tata Trusts' nominee directors.

The Trusts' position will be important because of both their majority ownership and their nominee representation on the Tata Sons board. But whether those rights can actually prevent or invalidate the reappointment is a matter of the company's Articles, applicable law and, if challenged, potentially the courts.

For now, the factual position is straightforward: the Tata Sons board has voted to give Chandrasekaran another five-year term, with the resolution passing after an independent director used his casting vote.

The unresolved issue is whether that vote completed the reappointment process or whether the separate requirement concerning the Tata Trusts' nominee directors means the matter needs to be reconsidered.

And that is the reason Chandrasekaran's third term, despite the board's approval, may not yet be the final word.