Trusts keen on change amid buzz that Chandra may be asked to stay on

Mumbai: On the eve of a crucial Tata Sons board meeting, majority stakeholder Tata Trusts has signalled keenness to usher in change at the helm of the conglomerate.Trusts chairman Noel Tata wants the Tata Sons board to formally begin the search for a successor to N Chandrasekaran, who announced over a month ago that he wouldn't seek reappointment as chairman once his current five-year term ends Feb 20, 2027. "That ship has sailed," said a person close to Noel Tata, stating his view that Chandra's reappointment should no longer be on the table.This comes amid speculation that the NRC of Tata Sons might ask Chandra to reconsider his decision (reported in TOI on Sunday), and stay on for at least two more years to see the IPO through.Noel in no mood to relent on ChandraTata Trusts had unanimously resolved last year to recommend extending Chandrasekaran’s term by another five years. After the Feb board meeting — where four directors backed the extension and Noel Tata alone opposed it — Noel had considered offering Chandrasekaran a two-year extension instead, taking him to 65, the retirement age for executive directors. But he now appears in no mood to relent even though his stand may be at odds with the views of most members of the Tata Sons board.His position is that Chandrasekaran ruled out another term himself in his August letter to the Tata Sons board. With that decision on record, the focus should now shift to finding his successor, the person said.Sir Dorabji Tata Trust (SDTT), a key shareholder of Tata Sons, has already indicated the need to constitute a selection panel for Chandrasekaran’s successor. SDTT has sent a letter to Tata Sons, which Noel Tata expects the NRC to consider and table before the board at its Thursday meeting.Apart from Noel Tata, Chandrasekaran and Tata Sons chief financial officer Saurabh Agrawal, the rest of the board sits on the NRC — Tata Trusts vice-chairman Venu Srinivasan and independent directors Harish Manwani and Anita George.Chandrasekaran’s letter to the board followed months of uncertainty over an extension. In the letter, he said a proposal to extend his tenure had failed to secure unanimous support, with one board member opposed. That member was Noel Tata.Noel Tata’s reluctance to approve Chandrasekaran’s reappointment stemmed from disagreements over the financial performance of certain businesses and the future structure of Tata Sons. Under Tata Sons’ articles of association, a five-member panel must be formed to recommend a candidate, with the formal appointment made by the Tata Sons board. Three members must be jointly appointed by SDTT and the Sir Ratan Tata Trust; the remaining two are nominated by the Tata Sons board — one a board member, the other an outsider.These developments come even as Tata Sons faces a regulatory issue, after the Reserve Bank of India rejected its application to surrender its registration as a core investment company, requiring it to comply with rules applicable to NBFCs. “The two matters are unrelated,” the person close to Tata said, “with the regulatory issue having no bearing on Chandrasekaran’s decision to leave.Get the latest Business News and Live updates. Download the TOI app.