Tata Sons’ chairman battle explodes: Why Tata Trusts say N Chandrasekaran’s reappointment is ‘legally void’
· OpIndia
Chandrasekaran has been heading the conglomerate since February 2017, when he succeeded Ratan Tata as its interim chairman. His tenure as the chairman ends on February 20, 2027. On August 12, 2026, he reportedly wrote a letter to the Directors expressing his decision not to offer himself for reappointment.
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However, weeks later, on Thursday, he was reappointed for another term of five years by the board of Tata Sons, despite Noel Tata, Chairman of Tata Trusts, which holds a 66% stake in Tata Sons, voting against his reappointment. The Tata Sons Board relied on a July 28, 2025, unanimous resolution by Tata Trusts, which expressed their appreciation of Chandrasekaran’s work as the chairman. The resolution reportedly proposed Chandrasekaran’s reappointment as Executive Chairman for a further term of five years. Later in September 2025, the board agreed in principle to re-appoint Mr Chandrasekaran as Executive Chairman for a further term of five years.
The same day, the board voted on the resolution. Noel Tata, who is a leading member of the conglomerate’s founding family, released a statement, saying that the resolution for the re-appointment of 63-year-old Chandrasekaran as Tata Sons’ chairman is illegal.
What Tata Trusts said
In its statement, the Trust argued that Chandrasekaran himself decided not to seek re-appointment as the chairman and that his decision was accepted and attained finality. It added that the decision was “freely taken” by Chandrasekaran, without any external pressure. “That was his own decision. It was freely taken and clearly expressed. It was not sought from him by this Board, it was not the subject of any resolution of this Board, and it was not the outcome of any process of review,” Noel Tata said in the statement.
He further said that the decision was made public without first informing the company’s stakeholders or holding any deliberations with them. Noel Tata contended that once the decision was made public, certain consequences followed, which cannot now be undone as the shareholders have accepted the decision and proceeded on it.
“I raise it because a communication of that character, once public, has consequences which this Board cannot afterwards undo. The Group’s employees, its lenders, its counterparties and the market have all proceeded upon it. So, has the majority shareholder. The page has turned,” Noel Tata said.
He added that Chandrasekaran’s reappointment nullifies his own decision and also the further process that followed it. The statement mentioned that the day after Chandrasekaran announced his decision not to seek reappointment, the Trust accepted his decision and advised Tata Sons to initiate the process of constituting a Selection Committee for the appointment of his successor in compliance with the Company’s Articles of Association.
The claim of ‘illegality’ of the reappointment
Tata Trusts is a group of multiple charitable and philanthropic trusts, which collectively hold a 66% stake in Tata Sons. The Sir Ratan Tata Trust (SRTT) and the Sir Dorabji Tata Trust (SDTT) are two principal trusts within the group. Under Tata Sons’ Articles of Association (AoA), the two principal trusts can jointly nominate one-third of the holding company’s directors as long as they collectively hold at least 40% of its ordinary share capital. The directors nominated by the trusts hold affirmative voting rights on certain reserved matters, which amounts to an effective veto over key strategic decisions.
The AoA also states that any matter requiring the board’s approval must receive the affirmative vote of a majority of directors nominated by the Tata Trusts. This effectively means that a majority vote on any such decision must include the affirmative votes of both trust-nominated directors to meet the requirement under the AoA.
Currently, the board of Tata Sons has six directors, comprising two directors nominated by the Tata Trusts, namely Venu Srinivasan and Noel Tata. In the board meeting where the resolution for the reappointment of Chandrasekaran was considered, only five directors, including two nominee directors, were present. However, the nominee directors did not cast a unanimous vote on the resolution. While Noel Tata voted against the reappointment, Venu Srinivasan voted in favour.
The Tata Trusts’ claim of illegality stems from this conflicting voting by the nominee directors. According to the Trusts, the diverging voting by nominee directors on the resolution failed to meet the requirement under the AoA. Therefore, the resolution failed. “Given that Mr Noel Tata, being one of the Trust nominee directors, voted against the proposal, it was rendered legally void and without any basis,” the Trusts said.
To support his argument, Noel Tata also presented a legal opinion from Justice Dr DY Chandrachud, former Chief Justice of India, regarding the correctness of the Trusts’ position. The Trusts said that the board of Tata Sons failed to take notice of the legal opinion.
On the other hand, the board’s view is that the voting by the board directors was a deadlock of 2:2, which was broken by the casting vote of the chairman, who voted in favour of the reappointment. So, according to the board, the resolution was valid.
Behind the scenes of the tussle
A look at the events preceding the board’s decision for the reappointment of Chandrasekaran indicates Noel Tata’s lack of trust in Chandrasekaran’s leadership and his concerns regarding the performance of major Tata businesses, Tata Group’s future strategy and the future of Tata Sons’ ownership or listing structure.
About seven months ago, in February 2026, the proposal for Chandrasekaran’s reappointment was taken up for the board’s approval. However, the proposal was deferred due to lack of unanimity. At the meeting, Noe Tata had reportedly raised concerns about the financial performance of Air India and BigBasket, both of which were making losses. He asked for course correction and sought clarity on the company’s five-year strategy.
Tata also wanted to know whether the exit of the Shapoorji Pallonji (SP) Group, which has a stake in Tata Sons, was possible without forcing Tata Sons to become a publicly listed company. Besides, Tata also wanted to know whether Chandrasekaran supported or opposed listing Tata Sons on the stock market.
Another legal complication
The above-mentioned technicalities in the reappointment of Chandrasekaran are not the only hurdle before Tata Sons in the appointment of its chairman. Another legal complication makes the task even more challenging for the company. The chairman of Tata Sons is selected by a five-member Selection Committee, which includes a member jointly nominated by the Sir Ratan Tata Trust and the Sir Dorabji Tata Trust. The decision regarding the nomination of Selection Committee members is taken by the trustees of the two trusts in the meetings of their respective boards.
Now, that is where the hurdle lies. The Sir Ratan Tata Trust is barred from holding board meetings since May 15, 2026, amid a dispute regarding the composition of their trustees. Consequently, it cannot hold a meeting with the Sir Dorabji Tata Trust to nominate a member to the Selection Committee.
Now that the reappointment of Chandrasekaran has been challenged by the Tata Trusts and the constitution of the Selection Committee faces a technical roadblock in the current circumstances, the appointment of chairman for Tata Sons has effectively been put in limbo.