Chandra reappointment move illegal: Neol Tata

While the board of Tata Sons Ltd. (the holding company of the Tata group) has reportedly approved a five-year extension for Chandrasekaran as chairman on Thursday, the Tata Trusts has issued a statement maintaining that the reported resolution to re-appoint Chandrasekaran as Chairman, Tata Sons, “is illegal”.

The decision of  Chandrasekaran not to offer himself for reappointment upon the conclusion of his current tenure on 20 February 2027, had been duly accepted and attained finality, the statement said. “On 12 August 2026, Mr. Chandrasekaran communicated to the Tata Sons Board, his own decision not to offer himself for reappointment – a decision that was freely taken, clearly expressed and not the outcome of any process of review. It was made public without prior intimation or any deliberations with the shareholders of the company. Once such a decision has been publicly communicated, it has consequences which cannot be afterwards undone, since the group’s employees, its lenders and counterparties, the market and the majority shareholder have all proceeded on it,” the statement said.

The Tata Trusts formally placed on record their acceptance of the decision the following day and advised Tata Sons to initiate the process for setting up a Selection Committee for appointing a successor, in accordance with the Articles of Association of Tata Sons. “The Trusts’ position remains unchanged, as a considered judgement of a majority shareholder. This position was reiterated in today’s board meeting by the Chairman, Tata Trusts. The resolution seeking to reappoint Mr. N. Chandrasekaran in the board meeting today, with four directors voting in favour and Mr Noel Tata against, was a legal nullity in view of the provisions of the Articles of Association of Tata Sons,” the statement said.

“Specifically speaking, the process for appointing a Chairman under the Article of Association requires a majority of the Trusts’ Nominee Directors voting in favour of the resolution. That process applies equally to a first appointment and to reappointing someone who already holds the office.The board, accordingly, cannot lawfully hold a meeting or pass a resolution on the Chairman’s appointment or reappointment unless both nominee directors are present, and cannot validly pass such a resolution unless both nominee directors vote in favour. 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. Mr. Noel N. Tata further submitted a legal opinion obtained from Justice Dr. DY Chandrachud (former Chief Justice of India) regarding the correctness of the Trusts’ stand. The same was not taken note of by the Board, the statement said. “The Tata Trusts remain committed to ensuring an orderly and timely leadership transition in the long-term interests of Tata Sons and the Tata Group,” it added.

Noel Tata’s poser to board members

The text of the statement made by Mr. Noel N. Tata in the Tata Sons Board Meeting held on 17 September 2026 is given below: 

Dear Board Members,

The decision was the Chairman’s own

1. On 12 August 2026 the Chairman wrote to this Board stating that he would not offer himself for a further term upon the conclusion of his present tenure on 20 February 2027. 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.
2. That letter was thereafter placed in the public domain. It was released without prior deliberation with the shareholders of this Company, and in particular without deliberation with the Tata Trusts, which hold approximately 66% of its equity. I raise this not by way of complaint, and I accept that a Chairman is entitled to speak of his own intentions. 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.

The majority shareholder has acted upon it

1. The Tata Trusts have accepted the Chairman’s decision, and have requested that this Company constitute a selection committee in accordance with its Articles of Association for the appointment of a successor. That acceptance and that request are matters of record. They were formally taken and formally communicated.
2. A resolution now for re-appointment moved at this meeting would therefore ask this Board to set aside three things at once: the Chairman’s own stated decision, the acceptance of that decision by the majority shareholder, and the further process which that shareholder has asked this Company to set in motion.

The question is in any event premature

1. There is a logically prior question which remains unresolved. The chairmanship of this Company is an office held by a director of this Company. The Chairman’s own position as a director is presently uncertain, the general meeting at which that question falls to be determined not having been able to proceed for want of quorum. Until that question is resolved, a resolution upon the chairmanship rests upon a foundation which has not yet been laid. We cannot put the cart before the horse.
2. I would add a practical consideration. A decision upon the chairmanship taken now, and afterwards found to have been taken in respect of a person whose office as director was not free from doubt, would be open to serious legal challenge by any shareholder who chose to bring it. This Company should not expose itself to a challenge of that kind at any time. It should certainly not do so at a moment when it has matters of far greater consequence pending before its regulator.