MUMBAI: Setting in motion the process of finding the next chairman of Tata Sons, majority stakeholder Tata Trusts issued a statement on Thursday saying it “respects” N Chandrasekaran’s decision not to offer himself for reappointment. Trusts control over 51.4% in Tata Group’s holding company.The statement, coming a day after Chandra said he would step down at the end of his five-year term in Feb 2027, puts Tata Trusts chairman Noel Tata, who is one of its two nominee directors on Tata Sons board, at the centre of the succession process.Sir Dorabji Tata Trust (SDTT), Tata Sons’ largest shareholder with a 27.9% stake, passed a resolution on Thursday to begin setting up a selection committee “as soon as possible in accordance with Tata Sons Articles of Association” to recommend a new chairman. Noel led the two-hour meeting, attended by the other five SDTT trustees.The process faces a procedural hurdle though. Sir Ratan Tata Trust (SRTT), the second-largest shareholder with a 23.5% stake, cannot currently hold a meeting because of a restraining order placed on it by the public charities regulator. Under Article 118 of Tata Sons’ AoA, a five-member committee must be constituted to choose a new chairman provided SDTT and SRTT together hold at least 40% of Tata Sons, which the two trusts comfortably do. Three committee members must be “jointly chosen by SDTT and SRTT” — they need not be the trusts’ nominees on Tata Sons board. The remaining two to be selected by Tata Sons board would have to be an existing board member and one independent outsider.Tata Trusts: Chandra emailed his decision to Noel & VenuThe committee can meet only if a majority of SDTT and SRTT nominees are present — so while SDTT has started the succession process, it cannot move forward until the order against SRTT is lifted.“SDTT has set the ball rolling but this won’t move the needle so long as SRTT remains under ban,” a person close to Noel Tata said. “SRTT has requested the Maharashtra charity commissioner to lift the restraining order but it is yet to hear from his office.”Thursday’s move comes against backdrop of tensions between Chandrasekaran and Noel over business policies, which contributed to Chandrasekaran’s decision to leave the 158-year-old, $185 billion conglomerate after four decades. Tata Trusts said Chandrasekaran emailed its nominee directors, Noel and vice-chairman Venu Srinivasan, on Aug 12: “He conveyed his decision to not offer himself for re-appointment as chairman upon the expiry of his current tenure on Feb 20, 2027.”SDTT said it respected the decision and thanked Chandrasekaran for his “contribution and stewardship” of Tata Sons and Tata Group during a decade of “significant change, growth and transformation”. Tata Trusts said it supported a “smooth, timely and orderly transition of leadership”.When Cyrus Mistry was removed as Tata Sons chairman in 2016, a five-member committee comprising Ratan Tata, Venu Srinivasan, former Tata Trusts trustee Amit Chandra, ex-Tata Sons director Ronen Sen and Prof Kumar Bhattacharya selected Chandrasekaran as his successor.
