3 weeks ago
Tata Sons Chairman Chandrasekaran Steps Down Amid Board Rift
The person in charge of one of India's biggest groups of companies is leaving his job.
His name is N Chandrasekaran, and he led Tata Sons, which looks after more than 30 companies.
He said he will not ask to be chosen again for another five years.
He explained that the people who watch over the company did not all support him.
The charity group that owns most of the business, Tata Trusts, had arguments with him about how to run things.
They disagreed about whether the company should be sold on the stock market.
They also disagreed about problems at the airline Air India and about how to let a smaller partner leave.
Because they could not agree, the decision about his job was delayed for six months.
Chandrasekaran will stay in his role until February so that everything stays calm during the change.
After the news, the price of Tata company shares went down.
Tata Sons chairman N Chandrasekaran said he will not seek reappointment, citing a lack of board support and a six-month impasse over succession.
Reuters reported that Noel Tata, chairman of Tata Trusts — which owns 66% of Tata Sons — opposed Chandrasekaran's reappointment.
The two sides disagreed on a potential listing of Tata Sons, losses at Air India, an exit for minority shareholder Shapoorji Pallonji Group, and board representation.
Tata stocks fell on the news, with TCS down 5.1%, Tata Motors down 2.5%, and Tata Steel and Titan each losing about 2%.
Chandrasekaran, who joined Tata in 1987 and has led Tata Sons since 2017, will remain chairman until February and would have served an unprecedented third five-year term.
- Who
- N Chandrasekaran, chairman of India's Tata Sons, who is stepping down; Noel Tata, chairman of Tata Trusts, opposed his reappointment
- What
- Chandrasekaran will not seek reappointment and will leave as Tata Sons chairman at the end of his term in February
- Where
- India; Tata Sons and the wider Tata Group
- When
- Announced on Wednesday (the 12th); he will remain in the role until February
- Why
- Lack of board backing following lengthy disagreement with Tata Trusts over a possible listing of Tata Sons, Air India losses, minority shareholder exit and board representation
Tata Trusts (Noel Tata)
N Chandrasekaran
Listing of Tata Sons and minority shareholder exit
Tata Trusts (Noel Tata)
Noel Tata sought a commitment that Tata Sons would never be listed and pressed for an exit for the Shapoorji Pallonji Group without taking the company public.
N Chandrasekaran
Chandrasekaran was reportedly unwilling to give a commitment that Tata Sons would never be listed.
Reappointment and strategic roadmap
Tata Trusts (Noel Tata)
Tata Trusts opposed the five-year reappointment and sought greater clarity on the group's five-year strategic roadmap and the future structure of Tata Sons.
N Chandrasekaran
Chandrasekaran said clarity on leadership is important for employees, investors, partners and other stakeholders, and that six months after the original delay no resolution had been reached.
Key facts
- Role
- Chairman, Tata Sons
- Tata Trusts stake in Tata Sons
- 66%
- Reappointment decision
- Postponed in February; unresolved for six months
- Tenure
- Will continue as chairman until February
- TCS share reaction
- Down 5.1%
- Tata Motors share reaction
- Down 2.5%
- Tata Group combined revenue
- $185 billion (past financial year)
- Listed group market capitalisation
- $277 billion as of March 31
Quotes
N. Chandrasekaran
Chairman of Tata Sons
“It has been 6 months since that board meeting, and no resolution has been reached till date, and clarity on leadership is important for employees, investors, partners and other stakeholders.”
easterneye.biz
Sources
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