For some time now, many types of movements are being seen in Tata Group. Also, such sounds are being heard which were never heard before. In fact, people associated with this matter said that Tata Trusts Chairman Noel Tata told the board of Tata Sons after the meeting held last week that many important issues are still unresolved, due to which the holding company’s Chairman N. It is too early to have any formal discussion on Chandrasekaran’s reappointment.
He said that this could lead to a standoff between Chandrasekaran and Tata. Tata sought more clarity from Chandrasekaran on the group’s five-year strategic roadmap, a framework for giving Shapoorji Pallonji Group an exit option without having to take Tata Sons public, and also sought his formal position on the long-running contentious issue of listing.
These issues have also gained momentum amid the ongoing turmoil over governance and other matters in the trusts and the group’s holding company and questions being raised on the performance of units like Air India and BigBasket. At the end of the board meeting held on 26 May, some directors informally asked whether Chandrasekaran’s appointment for a third term could be considered for the next time.
consensus required
According to people in the know, in response to Chandrasekaran’s re-appointment, Noel Tata said that it was still too early, and pointed to unresolved issues and unanswered questions that needed further discussion. The chief executives of Air India, Tata Electronics and Tata Digital gave presentations about their respective businesses to the board in the meeting. Executives associated with this matter said that Noel Tata gave detailed feedback on BigBasket and Air India.
Chandrasekaran had called a special board meeting on May 26 to answer in detail the issues raised by Noel Tata in the previous board meeting of the holding company (held on February 24). In that last meeting, the decision to consider his appointment for the third time was postponed. Tata Trusts holds 66 percent stake in Tata Sons, through which it controls the company. SP Group has 18 percent stake, which it wants to sell to repay its debt.
Noel Tata had expressed concern over the losses being incurred by Air India and BigBasket and talked about taking necessary steps for improvement. The next board meeting of Tata Sons is to be held on June 12, in which the annual accounts will be discussed. People familiar with the conversation said that Noel Tata also indicated that any time frame or date for considering re-appointment would be decided only through mutual discussion and consensus.
SP group case
Tata Sons and Noel Tata did not comment on this matter. According to officials close to Tata Sons, discussing the exit plan with SP Group does not make much sense unless there is clarity on the listing issue from the Reserve Bank of India (RBI). One of them said that the value of Tata Group is so high that a non-listing option to buy back the stake from SP Group cannot be easily considered.
Unless there is any clarity from RBI on this matter, no one can move forward. As an ‘upper-layer’ non-banking finance company, Tata Sons is required to launch an initial public offering (IPO), which could potentially lead to ownership dilution. He has sought exemption from RBI in this matter.
There is no hurry in reappointment.
It is also understood that Chandrasekaran is not keen to present any formal 5-year development plan at this stage. Officials associated with the matter said that similarly, they are in no hurry to raise the matter of re-appointment. Officials said that during Ratan Tata’s tenure, the issue of reappointment was usually raised a month before the end of his tenure.
It was Tata Trusts that passed a resolution in 2025 that to ensure stability in leadership, the issue of Chandrasekaran’s reappointment should be taken up a year before his tenure ends. People familiar with the discussions said that at the May 26 meeting, Chandrasekaran had the CEOs make a detailed presentation to the board and Tata Trusts Chairman Noel Tata. Unlike the previous board meeting, which was dominated by intense scrutiny and unresolved questions, this session focused primarily on ongoing business.
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