Discussion of internal differences in Tata Group, questions raised on Chandrasekaran's third term

The Tata Sons board has yet to make a final decision on retaining Chairman N. Chandrasekaran for a third term. This has raised questions about the recommendation by the trustees of the Tata Trusts last year to extend his term. 

According to reports, the issue was discussed at the Tata Sons board meeting on Tuesday, but no final decision was taken. Experts believe this could be a sign of differences within the Tata Group's holding company.

Questions raised on the decision of the trustees

According to reports, Tata Trusts Chairman Noel Tata has set certain conditions for Chandrasekaran's reappointment. 

These include losses at companies like Air India, risks associated with significant investments in the semiconductor and battery businesses, and a guarantee that Tata Sons will not be listed on the stock exchange. 

Sources said this raises questions about the validity of the resolution unanimously passed by the trustees last year. However, another source said that the resolution still stands and will be implemented only after due process.

Tata Trusts holds a large stake

Tata Trusts own approximately 66% of Tata Sons, which controls the Tata Group, which operates in various sectors such as automobiles, steel, software, aviation, and semiconductors.

Discussing internal differences

Over the past year, reports of differences within the Tata Trusts have surfaced. According to reports, senior group leaders, including Noel Tata and Chandrasekaran, met with Home Minister Amit Shah and Finance Minister Nirmala Sitharaman during this period. The government reportedly advised resolving the issues amicably and avoiding public controversy.

Appointments to the trust will also be affected.

In January, a board meeting of the Sir Ratan Tata Trust, scheduled to discuss the appointment of Noel Tata's son, Neville Tata, as a trustee, had to be cancelled due to a lack of quorum. Previous attempts to include him had failed. 

However, last November, Neville Tata and former group executive Bhaskar Bhat were appointed trustees of the Shri Dorabji Tata Trust, which holds approximately 28% of Tata Sons, while the Sir Ratan Tata Trust holds 23.6%. 

Tata Trusts are Tata Sons' largest shareholder, so the decision on Chandrasekaran's third term is now under close scrutiny.