After disagreements broke out in the board meeting of Tata Sons on Tuesday, the executive chairman, N Chandrasekaran, asked for a deferment of the discussion on his reappointment for a third term, as per the media reports.
The reports added that during the meeting, Noel Tata, chairman of Tata Trusts, flagged concerns over losses in some of the Tata Group’s newer ventures, prompting a detailed discussion among board members. Other directors, however, backed the reappointment of Natarajan Chandrasekaran, noting that the losses stemmed largely from greenfield investments and reflected the typical gestation period such businesses require before turning profitable.
Noel Tata, a nominee of Tata Trusts on the board of Tata Sons, along with Venu Srinivasan. The meeting was attended by all board members, including Tata Trusts chairman Noel Tata and vice chairman Srinivasan. N Chandrasekaran still has about a year left in his current term, which runs until February 2027.
The reappointment would require a special resolution and an exception to Tata Sons’ retirement policy, which generally bars non-executive roles beyond the age of 65. Natarajan Chandrasekaran is set to turn 63 in June.
The reports added that Noel Tata is learnt to have outlined four conditions that N Chandrasekaran would need to meet before any reappointment as chairman of Tata Sons is considered. One of the key points raised was that Tata Sons should remain unlisted, in line with the Reserve Bank of India guidelines governing so-called upper-layer NBFCs or shadow banks, a category under which large conglomerates such as Tata Sons fall.
A second condition, reports noted, was that the chairman should ensure the holding company remains debt-free. The third relates to capital discipline, ensuring that the group’s reserves are not significantly depleted by aggressive spending on high-risk investments. The fourth was that losses arising from acquisitions such as Air India and BigBasket should be brought under control. |
