A major dispute has arisen between Tata Sons Pvt. Ltd.’s Board and its majority owner, Tata Trusts, regarding the reappointment of N. Chandrasekaran as Tata Sons chairman for a five-year tenure and the listing of the company as mandated by Reserve Bank of India (RBI) guidelines. Tata Trusts has termed Mr. Chandrasekaran’s appointment “illegal”.

On Thursday (September 17, 2026), at a scheduled board meeting of Tata Sons, the Board requested the company’s executive chairman, Mr. Chandrasekaran, to reconsider his decision to not seek reappointment and continue for five years and he “acceded to the request”.

“The Board thereafter resolved by a majority vote to re-appoint him as Executive Chairman for a further term of five years upon the expiry of his current tenure [in February 2027],” Tata Sons said in a statement.

On August 12, Mr. Chandrasekaran had said that he would not seek reappointment after his tenure ended since one board member, Noel Tata, did not approve it.

While four board members – Venu Srinivasan, Harish Manwani, Saurabh Agarwal and Anita M. George – approved the reappointment, Mr. Tata, also the chairman of Tata Trusts that holds a 66% stake in the holding company, voted against it.

The Board also resolved to initiate steps to comply with RBI guidelines and decided to seek guidance from the RBI, Tata Trusts and other stakeholders on applicable compliance requirements, it said.

On Saturday (September 12, 2026), the RBI rejected Tata Sons’ application to de-register its Core Investment Company NBFC licence and directed it to immediately comply with listing regulations.

Tata Sons said the Board had received from Tata Trusts its unanimous resolution, dated July 28, 2025, expressing its appreciation of Mr. Chandrasekaran “for his stewardship of the Group from 2017 onwards”.

“In recognition of these efforts, the Tata Trusts resolved that he be re-appointed as Executive Chairman for a further term of five years upon the expiry of his current term. Subsequently, in September 2025, the Board of Tata Sons agreed in principle to re-appoint Mr. Chandrasekaran as Executive Chairman for a further term of five years,” it said in a statement.

“Pursuant to applicable provisions of law, the Board decided to obtain the relevant formal approval in February 2026. But in the absence of unanimity, the resolution was deferred for decision. In subsequent Board meetings in May 2026 and June 2026, this matter was discussed but was not resolved,” the company said.

In view of the above, on August 12, Mr. Chandrasekaran, in a letter, had opted not to offer himself for re-appointment. On September 3, the Nomination and Remuneration Committee (NRC) of the Board, comprising Mr. Srinivasan, Mr. Manwani and Ms. George, met to discuss the re-appointment.

“After due deliberation and in recognition of his contributions and the larger interests of the Tata Group, the NRC unanimously resolved to request him to reconsider his decision and to recommend him for re-appointment at the next Board meeting,” the statement said.

As Mr. Chandrasekaran decided to revisit his decision not to seek re-appointment, the Tata Trusts reiterated its position that the decision has been “duly accepted and has attained finality”.

“On 12 August 2026, Mr. Chandrasekaran communicated to the Tata Sons Board, his own decision not to offer himself for reappointment - a decision that was freely taken, clearly expressed and not the outcome of any process of review. It was made public without prior intimation or any deliberations with the shareholders of the company. Once such a decision has been publicly communicated, it has consequences which cannot be afterwards undone, since the Group’s employees, its lenders and counterparties, the market and the majority shareholder have all proceeded on it,” Tata Trusts said.

Tata Trusts said it formally placed on record its acceptance of the decision the following day and advised Tata Sons to initiate the process for setting up a selection committee for appointing a successor, in accordance with the Articles of Association of Tata Sons.

“The Trusts’ position remains unchanged, as a considered judgement of a majority shareholder. This position was reiterated in today’s board meeting by the Chairman, Tata Trusts. The resolution seeking to reappoint Mr. Chandrasekaran in the Board meeting today, with four Directors voting in favour, and Mr. Noel Tata against, was a legal nullity in view of the provisions of the Articles of Association of Tata Sons,” it said.

Specifically speaking, Tata Trusts said, “The process for appointing a Chairman under the Articles of Association requires a majority of the Trusts’ Nominee Directors voting in favour of the resolution. That process applies equally to a first appointment and to reappointing someone who already holds the office.”

“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, and cannot validly pass such a resolution unless both nominee directors vote in favour. Given that Mr. Noel Tata, being one of the Trust nominee directors, voted against the proposal, it was rendered legally void and without any Basis,” it said.

At the board meeting, Mr. Tata submitted a legal opinion obtained from Justice D.Y. Chandrachud, former Chief Justice of India, regarding the correctness of the Trusts’ stand. “The same was not taken note of by the Board,” Tata Trusts said.

Tata Trusts said it remains committed to ensuring an orderly and timely leadership transition in the long-term interests of Tata Sons and the Tata Group.

On the Board’s decision to follow the RBI’s order, Tata Trusts has asked Tata Sons to explore options other than listing and save the ‘Tata model’.

Stating that it has not agreed to the listing, Tata Trusts reiterated its position to preserve the structure of Tata Sons and the Tata Group, which is more than a century old.

“The communication received from the RBI was discussed. The Board agreed that all available options, and not listing alone, should be thoroughly explored and assessed on an immediate basis, with the findings and recommendations presented to the Board. Following this review, a separate Board meeting will be convened to consider the assessment and determine the appropriate course of action,” Tata Trusts said.

“Tata Sons Board had already considered the matter of public listing and reached a unanimous conclusion in March 2024, under the guidance of the late Mr. Ratan Tata, and had resolved that the Company should remain unlisted. In July 2025, the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, also unanimously passed resolutions that the Company should remain unlisted and the same was duly communicated to Tata Sons for necessary action,” it said.

At the Board meeting, while speaking about the House of Tatas, Mr. Tata, said, “Tata Group was conceived as a national service carried on through business and has conducted itself so in this manner for over a century. The structure of its ownership is what has allowed it to remain so and has permitted Tata Sons to act repeatedly in ways that a purely commercial calculus would not have supported.”

“Therefore, what is at stake today is something very fundamental: the nature and character of the Tata Group as a unique institution. What makes the Tata operating structure unique is that it is premised on trust and its majority shareholder is a charity. That charity funds hospitals, universities, and research from the dividends it receives. It exists for public purpose and for nation building,” he said.

He further said, “That is not sentiment. It is the operating model of this House, and it has stood the test of time for more than a century. A listing will destroy its character and strike at the heart of this principle.”

Tata Trusts said it will continue to engage with Tata Sons and the relevant authorities to support a fair, transparent, and legally compliant process.

At the Board meeting, Mr. Tata proposed providing liquidity to the SP Group, which holds little more than 18% stake in Tata Sons and had been asking for listing.

The proposal was received from the Shapoorji Pallonji (SP Group) regarding monetisation of a portion of their Tata Sons shareholding held by Sterling Investments Corporation Private Limited (SICPL) and Cyrus Investments Private Limited (CIPL).

The transaction envisages a sale of such number of Tata Sons shares held by SICPL and CIPL as would, at a minimum valuation, yield a gross consideration of ₹25,000 crore.

The share buyout would be carried out in two tranches over 18 months. Tata Sons would initiate a selective capital reduction process through the NCLT and the valuation of Tata Shares would be done as per the income tax fair value.

Mr. Tata suggested that various avenues could be used to raise funds for the purpose, including internal cash flows, sale of listed shares, bringing in an investor into some of the newer businesses, and listing, upon an offer for sale, of some of the businesses. He requested the Board to take the necessary steps for initiating the NCLT process and authorise the operating team of Tata Sons and the Tata Trusts to continue discussions with the SP Group, and the bankers, and report to the Board.