Noel, Chandra set to hold talks ahead of Tata Sons board meet
Noel Tata, who is also a Tata Trusts nominee on the board of Tata Sons, had raised various concerns at the last board meeting of the Tata Group holding company on February 24. These concerned high-risk investments, reducing losses on new businesses, an exit option for the Shapoorji Pallonji (SP) Group and an assurance that Tata Sons would remain an unlisted entity.
At that meeting, Noel Tata had suggested a separate meeting with Chandrasekaran to discuss these business concerns. It is understood that the upcoming talks have been initiated in response to this suggestion from the Tata Sons chairman.
Tata Trusts holds a 66% majority stake in Tata Sons. SP Group owns 18.4% of the shares, which it wants to dispose of to repay its debt.
Noel Tata and Tata Sons did not comment.
Chandrasekaran is expected to share with Tata the presentations to be made before the board, executives said. “This move also reflects good governance. These issues can be discussed candidly and resolved in a private meeting between the two,” one of them said.
The meeting holds significance at a time when there are said to be tensions between Tata Trusts and Tata Sons, with bigger questions surrounding leadership continuity, capital allocation, new business and the group’s strategic direction, which are expected to be discussed before the board meets. After the February 24 Tata Sons board meeting, there was no communication between the two chairman on the issue.
According to sources, the apparent tension has begun to put pressure on decision-making at the holding company level, with key appointments being postponed and discussions on various strategic issues related to new businesses slowing down.
This development comes amid speculation that the Reserve Bank of India (RBI) may mandate listing of Tata Sons under its rules for senior non-banking financial companies (NBFCs).
This will require Tata Sons and Tata Trusts to negotiate separately on the issue.
At the meeting on February 24, directors of Tata Sons opposed Tata Trusts chairman Noel Tata’s view on the reappointment of Chandrasekaran. The matter was postponed and has since led to a breakdown in communication between stakeholders, according to sources with knowledge of the matter.
The proposal to give Chandrasekaran a third five-year term was put forward in the last board meeting to extend his tenure as director till 2032. His second term ends in February 2027.
Tata Sons was classified as a top-tier NBFC in September 2022 and was required to be listed by September 2025. The company has since approached the RBI for exemption from deregistration and listing requirement.
