Tata Trusts says re-appointment of Chandrasekaran as Chairman is illegal

Tata Trusts, which own about 66 percent of Tata Sons, have said the Tata Sons board resolution reappointing N Chandrasekaran as executive chairman for another five years is illegal. They maintain that his August decision not to seek another term is final.

In a statement issued after the board meeting on September 17, 2026, the Trusts said four directors voted for the resolution. Noel Tata, chairman of Tata Trusts and one of the Trusts' nominee directors on the Tata Sons board, voted against it. The Trusts described the resolution as a "legal nullity" under Tata Sons' Articles of Association. Because a Trusts nominee had voted against it, the Trusts said the resolution was "legally void and without any basis".

The Trusts set out their reading of the Articles in three parts:

• The process for appointing a chairman requires a majority of the Trusts' nominee directors to vote in favour.
• That requirement applies equally to a first appointment and to the reappointment of a sitting chairman.
• The board therefore cannot lawfully hold a meeting on, or pass, such a resolution unless both nominee directors of Tata Trusts are present and both vote for it.

Noel Tata placed before the board a legal opinion from former chief justice of India DY Chandrachud supporting this position. The Trusts said the board did not take note of the opinion.

The Trusts' case turns on Chandrasekaran's communication to the board on August 12, 2026. In it, he said he would not offer himself for reappointment when his tenure ends on February 20, 2027. The Trusts described that decision as "freely taken" and "clearly expressed", and said it was not the outcome of any review. They added that it was made public without prior intimation to, or deliberation with, shareholders. Once announced, the Trusts argued, the decision had consequences that "cannot be afterwards undone", because employees, lenders, counterparties, the market and the majority shareholder had all acted on it.

The Trusts said they formally accepted the decision the next day and advised Tata Sons to set up a Selection Committee under the Articles to appoint a successor. The Trusts said they remain committed to an orderly and timely succession and want the Selection Committee to proceed in line with the Articles.

Tata Sons has given a different sequence of events. It said the board's Nomination and Remuneration Committee unanimously asked him on September 3 to reconsider his decision, and that he agreed to do so at the September 17 meeting, after which the board approved his reappointment by majority.