The reappointment of N Chandrasekaran as Tata Sons chairman for another five years has exposed growing differences between the conglomerate’s board and Tata Trusts, which controls a majority stake in the holding company.
Meanwhile, Tata Sons is dealing with a proposed $2.6 billion stake sale by a minority shareholder and an ongoing debate over whether the holding company should be listed on the stock market. Tata Trusts holds a 66% stake in Tata Sons, giving it substantial influence over the holding company. Sir Ratan Tata Trust, one of its two largest institutions, holds a 23.6% stake in Tata Sons.
Decisions concerning the appointment of the Tata Sons chairman require the approval of both its nominees on the company’s board — Noel Tata and Venu Srinivasan, according to the Trusts’ position. Srinivasan did not While Noel Tata voted against the decision. The differences between Chandrasekaran and Tata Trusts extend beyond the question of his reappointment. The two sides have also disagreed over Air India’s performance, a possible listing of Tata Sons and a proposed stake sale by a minority shareholder in the holding company. However, a regulatory dispute involving one of its major charitable entities has complicated its ability to exercise that control. The Trusts is an umbrella organisation of affiliated charities.
However, Chandrasekaran continued in the role, while Noel Tata took charge of the charitable institutions that hold a majority stake in Tata Sons.
Noel Tata had previously been speculated to succeed Ratan Tata as the head of the group.
