NEW DELHI: The chairman of India’s Tata Sons, N Chandrasekaran, said on Wednesday (Aug 12) that he will not seek reappointment at the end of his term due to a lack of backing from the board, following tensions with the charity arm that controls the salt-to-aviation Tata Group.
His imminent departure could add to headaches for the 158-year-old group which is grappling with mounting losses at group airline Air India, a sharp decline in sales for its Jaguar Land Rover car business and the fallout of a recent data leak at its electronics arm that affected its top clients Apple and Tesla.
Disagreements have been brewing between Chandrasekaran, 63, and Tata Trusts, which owns 66 per cent of Tata Sons, over the past few months. The two sides have clashed over whether Tata Sons should be listed, losses at group company Air India, how to handle the planned exit of a minority shareholder and board representation.
In February, Tata Sons – which controls more than 30 Tata companies, including IT firm TCS, Tata Motors and Air India – postponed a decision on reappointing Chandrasekaran as chairman after Noel Tata, chairman of Tata Trusts, opposed the move.
„It has been 6 months since that board meeting, and no resolution has been reached till date,“ Chandrasekaran said in his statement, adding he would continue in the position until February.
„Tata Sons is a very large institution and there are many strategic projects that are under critical stages of execution … clarity on leadership is important for employees, investors, partners and other stakeholders,“ he added.
Tata Trusts did not respond to a Reuters request for comment.
Feuds between Tata Sons and Tata Trusts have roiled the storied 158-year-old Indian conglomerate before, most famously in 2016 when Tata Sons‘ board sacked the then-chairman after he fell out with group patriarch and charity arm’s head Ratan Tata over corporate governance issues.
Shares in TCS, where Chandrasekaran built his career, slid 5.1 per cent, while Jaguar Land Rover-parent Tata Motors fell 2.5 per cent. Tata Steel and fashion accessory brand Titan each lost about 2 per cent.