Noel Tata battles boardroom coup

The decisions exposed an extraordinary fracture at the top of the Tata Group. Four directors backed Chandrasekaran’s reappointment, while Noel Tata, chairman of Tata Trusts and one of its two nominees on the Tata Sons board, voted against it. The Trusts later called the resolution a “legal nullity”, maintaining that the board could not validly reappoint the chairman without the support of both nominee directors.

The board also discussed the Reserve Bank of India’s September 11 communication rejecting Tata Sons’ application to surrender its core investment company registration. While Tata Sons said it would initiate steps to comply with the regulatory requirement, Tata Trusts offered a different account of the deliberations, saying the board had agreed to examine all available options rather than proceed directly to a listing.

According to the Trusts, the alternatives are to be assessed immediately and the findings presented to the board. A separate meeting will then be convened to determine the company’s course of action.

The Trusts said they had not agreed to a listing and that their position had remained consistent. They pointed to a unanimous Tata Sons board decision in March 2024, taken under the guidance of the late Ratan Tata, that the company should remain private. The Sir Dorabji Tata Trust and Sir Ratan Tata Trust adopted similar resolutions in July 2025 and communicated them to Tata Sons, the statement said.

Noel Tata argued that the ownership structure—under which charitable trusts control Tata Sons—had allowed the group to pursue public and national objectives beyond purely commercial returns. Listing the holding company, he said, would fundamentally alter that model.

“If I am forced to vote, then I would have no option but to veto any decision to list,” Noel told the board, according to a statement released by Tata Trusts. “A listing will destroy its character and strike at the heart of this principle,” Noel said, adding TT Sons should ask the RBI for at least three years to meet the requirements if a listing is eventually necessary.)))

The listing question has divided the Trust nominees on the Tata Sons board. Noel Tata opposed moving towards a public offering, while Venu Srinivasan supported compliance with the RBI requirement.

Chandrasekaran’s reappointment marks a reversal of his August 12 announcement that he would not seek another term when his current tenure ends on February 20, 2027. Tata Sons had agreed in principle to offer him a fresh term earlier this year, but the matter was deferred in February after it failed to secure unanimity and remained unresolved at subsequent board meetings.

The company said its Nomination and Remuneration Committee met on September 3 to discuss Chandrasekaran’s letter and unanimously asked him to reconsider. The committee cited his contribution and the wider interests of the group while recommending his reappointment.

At Thursday’s meeting, Chandrasekaran agreed to reconsider his decision, following which the board approved a fresh five-year term by majority vote, Tata Sons said.

Noel Tata challenged both the process and the premise of reversing Chandrasekaran’s earlier decision. In a statement placed before the board, he said the chairman had made the decision voluntarily and communicated it publicly without first consulting shareholders, including Tata Trusts.

Once made public, such a decision had consequences that the board could not subsequently undo, Tata said. Employees, lenders, counterparties, markets and the controlling shareholder had all proceeded on the understanding that Chandrasekaran would leave when his tenure ended. “The page has turned,” he said.

Tata Trusts had formally accepted Chandrasekaran’s decision and asked Tata Sons to constitute a selection committee to identify his successor. Noel Tata also argued that the RBI directive and leadership succession should be dealt with separately.

The vote tested the special rights enjoyed by the Trusts under Tata Sons’ Articles of Association. Noel Tata and Srinivasan, the two Trust-nominated directors, took opposing positions, leaving the board to proceed on the strength of votes from the other directors.

Harish Manwani, the independent director who chairs the Nomination and Remuneration Committee, supported Chandrasekaran’s reappointment, people aware of the proceedings said. Tata Sons had sought legal advice before the meeting on how the Trust nominees’ affirmative voting rights operated when the two nominees disagreed.

The Trusts maintained that the Articles require both nominee directors to be present and to support the appointment or reappointment of a chairman. Since Noel Tata opposed the proposal, the resolution had no legal effect, they said.

“The Board, accordingly, cannot lawfully hold a meeting or pass a resolution on the Chairman’s appointment or reappointment unless both nominee directors are present,” Tata Trusts said. A valid resolution, it added, required both to vote in favour.

The Trusts said Noel Tata had placed before the board an opinion from former Chief Justice of India D Y Chandrachud supporting their interpretation, but it was not taken note of.

Legal experts said the dispute could escalate. H P Ranina, an advocate in the Supreme Court, said the reappointment could not take effect if the Articles required all Trust-nominated directors to agree. The other route, he said, would be for the Trusts to change their position as controlling shareholder.

Chandrasekaran also faces a separate hurdle as a Tata Sons director. He is liable to retire by rotation and must be re-elected by shareholders before he can continue as chairman beyond his present term. That resolution was to be considered at the company’s annual general meeting, which was adjourned for lack of quorum and is yet to be reconvened.

Thursday’s meeting was intended to provide leadership continuity and a path towards regulatory compliance. Instead, Tata Sons emerged with a contested chairman, conflicting accounts of its listing strategy and a controlling shareholder warning that the group’s century-old model was at stake.