Mumbai, Sep 17 (PTI) Tata Sons plunged into its most explosive boardroom crisis since the ouster of Cyrus Mistry nearly a decade ago after directors voted Thursday to reappoint N Chandrasekaran as executive chairman for a further five years — only for Tata Trusts, the conglomerate's majority shareholder, to declare the vote void within hours.

The nearly three-hour meeting produced duelling statements, a disputed vote count, and a legal opinion from a former Chief Justice of India, leaving India's largest business house with two rival claims over who legitimately leads it.

Chandrasekaran, 63, had told the board last month he would not seek another term when his tenure ends on February 20, 2027, after the board repeatedly failed to reach unanimity on renewing his position. That changed, people familiar with the deliberations said, after the Reserve Bank of India rejected Tata Sons' bid to avoid a stock-market listing — a shift that led directors to lean on Chandrasekaran's continuity to reassure investors ahead of any listing process.

Tata Sons said in a statement that "Chandra acceded to the Board's request to reconsider his decision" and that the board "thereafter resolved by a majority vote to re-appoint him as Executive Chairman for a further term of five years". Four directors backed the resolution; Noel Tata, chairman of Tata Trusts, voted against. The board also said it would "initiate steps to comply with the applicable RBI Guidelines" in consultation with the regulator and Tata Trusts.

Tata Trusts, which together with affiliated trusts control about 66 per cent of Tata Sons, rejected the outcome outright, branding the resolution a "legal nullity". The Trusts said Chandrasekaran's original decision to step aside "has been duly accepted and has attained finality" and that they had already directed Tata Sons to set up a selection committee for a successor.

Citing the company's Articles of Association, the Trusts argued that chairmanship resolutions require both Trust-nominated directors to vote in favour and since Noel Tata dissented, the vote "was rendered legally void and without any basis." The Trusts disclosed that Noel Tata had submitted a legal opinion from former Chief Justice of India DY Chandrachud backing their position, which "was not taken note of by the Board".

In a pointed statement to directors, Noel Tata argued the reappointment vote asked the board "to set aside three things at once: the Chairman's own stated decision, the acceptance of that decision by the majority shareholder, and the further process which that shareholder has asked this company to set in motion." He also raised a procedural challenge, saying his own standing as a director was "presently uncertain" after a general meeting "was not able to proceed for want of quorum", warning that any vote taken under that cloud "would be open to serious legal challenge by any shareholder who chose to bring it".

He urged directors not to let the succession fight bleed into the separate RBI listing dispute. "It would not serve this company for a regulatory development to determine the outcome of a succession process," he said, adding that "the page has turned" on Chandrasekaran's original exit.

In a second, separately issued statement, Tata Trusts drew a hard line on the listing question that has driven the crisis, declaring that the RBI's September 11 communication rejecting Tata Sons' deregistration bid was discussed at Thursday's meeting and that the board agreed "all available options, and not listing alone, should be thoroughly explored and assessed on an immediate basis", with a separate board meeting to follow once that review is complete.

The Trusts noted this was not a new position: the Tata Sons board had unanimously resolved to stay unlisted in March 2024 "under the guidance of the late Ratan Tata", and the Sir Dorabji Tata Trust and Sir Ratan Tata Trust separately passed unanimous resolutions to that effect in July 2025. "The position of the Tata Trusts has remained consistent and unchanged," the statement said.

The clash revives memories of Tata Sons' last great boardroom war — the 2016 ouster of Cyrus Mistry as chairman, orchestrated by Ratan Tata and the Tata Trusts, which triggered years of litigation ending only when the Supreme Court upheld the Trusts' authority in 2021. That fight, too, pitted the Trusts' control over Tata Sons against a sitting chairman and minority shareholders — in that case the Shapoorji Pallonji Group, the Mistry family's investment vehicle, which holds roughly 18 per cent of Tata Sons and has separately pushed for a listing to unlock value from its stake.

This time the fault line runs through the Trusts themselves. The Sir Dorabji Tata Trust tried to bind nominee director Venu Srinivasan to vote against a Tata Sons listing, but Srinivasan refused, citing his independent duty as a director, exposing a rift inside the philanthropic bodies that jointly control the group.

The RBI classified Tata Sons as an "upper layer" non-banking financial company in 2022, a designation requiring listing within three years. That deadline lapsed in September 2025 while a deregistration request — filed after Tata Sons repaid more than Rs 21,000 crore in debt — sat under review. The RBI rejected that application on September 11, reviving the listing question the Trusts have long resisted.

Thursday's vote also appeared to short-circuit a succession process already under way: the Sir Dorabji Tata Trust had begun vetting candidates including Tata Steel chief TV Narendran, Tata Sons finance chief Saurabh Agrawal and NSE chief Ashish Chauhan. That process is now expected to be paused.

Neither side indicated any legal filing had been made as of Thursday, but with Tata Sons treating Chandrasekaran as reappointed and the Trusts treating the vote as void, the dispute looks set for a reckoning — potentially at the company's annual general meeting, which must ratify the appointment, or in court. An eventual Tata Sons listing could rank among India's largest IPOs, with the conglomerate's valuation estimated near USD 230 billion. PTI IAS ANZ SAP ANZ SAP SAP