Tata Sons chair Chandrasekaran resigns ahead of crucial Aug 18 vote

Tata Sons chairman N. Chandrasekaran has stepped down from his role amid escalating tensions with Tata Trusts, the group's charitable arm and largest shareholder, which controls roughly 66 per cent of Tata Sons, Reuters reported on Wednesday, citing a source with direct knowledge of the matter. Tata Group, Tata Sons, and its affiliates and units are yet to officially comment on the matter.

However, the report stated that Chandrasekaran will remain in office to complete his current term, which runs until February. The source declined to be identified given the sensitivity of the matter, as per the agency.

Multiple reports in the media following the story noted that Chandrasekaran had discussed the possibility with close associates ahead of Tata Sons' annual general meeting scheduled for 18 August, where shareholders are due to vote on his reappointment as a director.

The tensions apparently trace back to disagreements between Tata Sons and Tata Trusts over board representation, corporate strategy and the planned exit of minority shareholder Shapoorji Pallonji Group, a dispute that earlier led to the removal of a Tata Sons director. 

In February, Tata Sons' board had already postponed a decision on reappointing Chandrasekaran as chairman after Noel Tata, chairman of Tata Trusts, objected to the move. According to the source, Noel Tata had sought several conditions before backing a fresh term, including a written commitment that Tata Sons would never be listed on stock exchanges, a guarantee Chandrasekaran was reportedly unwilling to give. The two sides also clashed over board representation at Tata Sons. Tata Sons did not immediately respond to a request for comment, and Chandrasekaran could not be reached.

Chandrasekaran, who joined the Tata group in 1987 and became chief executive of Tata Consultancy Services in 2009, took over as Tata Sons chairman in 2017. His current term as chairman was due to run until February 2027, but this month's AGM would have decided whether he continues even as a director, a prerequisite for being chairman.

Complicating matters further, Vijay Singh, Vice-Chairman of Tata Trusts, stepped down from his position at the Sir Ratan Tata Trust (SRTT), a philanthropic organisation managed by a board of trustees, three days before the end of his term. 

This came on the heels of SRTT facing regulatory scrutiny over the composition of its board, after complaints from advocate Katyayani Agarwal and SRTT trustee Venu Srinivasan, the Chairman Emeritus of TVS Motor Company.