Tata Sons Board Backs Chandra for 5 More Years, Noel Tata Calls Decision Illegal
Tata Sons has approved a five-year extension for N Chandrasekaran as chairman, despite opposition from Tata Trusts chairman Noel Tata. The board reportedly voted 4-1 in favour of his continuation, with Noel Tata calling the decision illegal and recording his dissent. The meeting also approved Tata Sons’ listing following RBI’s rejection of its deregistration application.
- Republic Business
- 2 min read
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Tata Trusts, the largest shareholder accounting for 66% of stake in Tata Sons reiterated in a statement that N Chandrasekaran’s decision not to offer himself for reappointment as the chairman of Tata Sons, upon the conclusion of his current tenure had been accepted and had attained finality. The statement comes on the back of Chandrashekharan publicly announcing his decision to not seek reappointment as the Chairman of Tata Sons on August 1.
However, in a much-anticipated board meeting on Thursday, Tata Sons approved a five-year extension for N Chandrasekaran as chairman of the Tata Group holding company, allowing him to continue leading the group. But the decisions was not unanimous, as the board voted 4-1 in favor of N Chandrasekaran continuing as the leader.
Noel Tata, the Tata Trusts chairman considered the vote “illegal”, challenging the validity of a decision that could have significant implications for the leadership of India’s largest business group, according to reports. “I voted against Chandra’s appointment as chairman. My veto was wrongfully overridden on the basis of a legal opinion. The decision is illegal. I recorded my dissent,” Meanwhile, Venu Srinivasan, the non-executive director on the board of Tata Sons voted in favor of N. Chandrasekaran’s reappointment as the Executive Chairman of Tata Sons, putting him in direct opposition to Noel Tata.
In the Tata Sons board meeting, two issues were discussed, one was about the mandatory listing of Tata Sons and another dealt with the company’s top leadership.
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The Reserve Bank of India had mandated the public listing of Tata Sons because it is classified as an upper layer non-banking financial company under scale-based regulations. But within less than a week of the RBI rejecting Tata Sons’ application seeking to deregister itself as a core investment company, thereby mandating an immediate stock exchange listing, a three-hour-long board meeting of Tata Sons gave it the all-clear despite stiff opposition from Tata Trusts chairman Noel Tata, who is also a nominee director with veto power.