Tata chairman to step down amid trust tensions

NEW DELHI: N. Chandrasekaran, chairman of Tata Sons, has decided not to seek another term at the helm of India’s major business conglomerate, bringing his leadership tenure towards an end after growing differences with the group’s influential charitable trust arm.

Chandrasekaran, 63, said on Wednesday that he would remain chairman until his current term expires in February. He said greater certainty over the group’s future leadership was necessary because several major projects were at critical stages.

The decision follows months of disagreement between Chandrasekaran and Tata Trusts, which controls about 66% of Tata Sons. The two sides have reportedly differed over several important strategic and governance issues.

Among the disputed matters were the future ownership and structure of Tata Sons, whether the company should pursue a stock market listing, losses at Air India, the proposed departure of a minority shareholder and the composition of the board.

Tata Sons had postponed a decision on Chandrasekaran’s reappointment in February after Noel Tata, chairman of Tata Trusts, opposed extending his tenure. Six months later, the issue remained unresolved.

A person familiar with Chandrasekaran’s decision said the disagreement with Tata Trusts was the sole reason behind his decision not to seek another term.

Tata Trusts has not publicly commented on the development.

Leadership change comes at difficult time

Chandrasekaran’s planned departure comes as the Tata Group faces challenges across several major businesses.

Air India, which is controlled by Tata, has been struggling with losses following its return to private ownership. Tata’s automotive operations are also facing pressure, including weaker performance at Jaguar Land Rover.

The group’s electronics business has additionally faced the consequences of a recent data leak that affected major customers, including Apple and Tesla.

The leadership uncertainty immediately affected investor sentiment. Shares of Tata Consultancy Services, where Chandrasekaran spent most of his career, fell around 5% following news of his planned departure.

Tata Motors also declined, while Tata Steel and Titan recorded smaller losses.

From TCS intern to Tata chairman

Chandrasekaran joined Tata Consultancy Services as an intern in 1987 and spent his entire corporate career with the information technology company.

He rose through the ranks and became TCS chief executive in 2009. He was appointed chairman of Tata Sons in 2017.

He became the first chairman of Tata Sons who was not a member of the Tata family or from the Parsi community.

Under his leadership, Tata expanded its presence across technology, automobiles, aviation, electronics and consumer businesses.

The Tata Group is one of India’s oldest and most prominent business organisations. Its companies operate across a wide range of sectors, with products and services ranging from salt and consumer goods to automobiles, hotels, aviation and software.

The group’s publicly listed companies had a combined market value of hundreds of billions of dollars at the end of March, highlighting the potential significance of any leadership transition at Tata Sons.

Tata’s history has also included previous disputes between its corporate leadership and charitable trusts. One of the most prominent occurred in 2016, when the Tata Sons board removed chairman Cyrus Mistry following a bitter dispute involving governance and the group’s leadership.