Tata Sons agenda indicates N Chandrasekaran’s re-entry on cards

Tata Sons, the holding company of the Tata Group, which failed to secure the Reserve Bank of India’s (RBI) approval to surrender its core investment company (CIC) registration, has listed two unusual matters in the agenda for its board meeting on September 17, indicating that N Chandrasekaran’s return to the fray as chairman for a third term could be back on the table.

According to sources familiar with the matter, in the agenda, Tata Sons has listed an update from its nomination and remuneration committee (NRC), along with an update on the RBI letter, which rejected to remove from upper-layer non-banking financial company (NBFC) framework.

The inclusion of the two items, in addition to the regular updates on quarterly business, has triggered speculation within the Tata Group over whether Chandrasekaran’s exit in February 2027 is still a settled matter. The NRC is expected to formally take up the issue and revive the discussion on resignation.

Sources said the NRC updates are expected to bring up Chandrasekaran’s email communicating his decision not to seek a third term after his current tenure ends in February. “The NRC could argue that his departure at this stage may create a leadership vacuum, particularly with the RBI insisting on Tata Sons remaining listed,” according to the sources.

The NRC comprises Tata Trusts vice chairman Venu Srinivasan, Harish Manwani and Anita Marangoly George. Srinivasan has publicly supported the listing of Tata Sons. Manwani and George were among the board members who backed Chandrasekaran’s continuation when the issue was discussed in February, although the board deferred the decision after Noel Tata raised concerns over the performance and capital allocation of businesses including Air India and the new-age ventures. 

It is also clear that Noel Tata does not have the support of the other Tata Sons board members. This gives an opportunity to push Chandrasekaran's case. However, Tata holds veto power on behalf of Tata Trusts over decisions of the holding company.

The RBI’s rejection of Tata Sons’ request to surrender its CIC registration could strengthen the case for continuity of Chandrasekaran at the top of the group, the sources said. With the board agenda structured around these issues, a section within Noel Tata’s camp suspects that the process could be used to build a case for Chandrasekaran’s continuation. “The NRC is expected to put forward arguments supporting the continuity of Chandrasekaran,” sources said.

The development comes amid another point of contention between the two camps. According to sources, Chandrasekaran’s office began preparations for an initial public offering of Tata Sons in May under Saurabh Agrawal. Sources close to Noel Tata’s camp contend that this was contrary to the mandate given to Chandrasekaran.

“When Tata Trusts backed his extension for a third term, it was on the understanding that Chandrasekaran would negotiate with the RBI to keep Tata Sons private,” said an executive. The subsequent preparation for an IPO, therefore, has raised questions over whether the agreed approach has changed. The listing question had already emerged as a key point of disagreement during the February board deliberations.

The RBI’s latest move has added another layer to the dispute. On Tuesday, the central bank filed a caveat in the Bombay High Court in the Tata Sons listing matter, shortly after rejecting the company’s request to surrender its CIC registration. The caveat is intended to ensure that the RBI gets an opportunity to present its arguments before the court considers any ex parte relief to Tata Sons.

A caveat is a legal mechanism through which a party asks the court not to pass an order without giving it an opportunity to be heard. The move is significant because the regulator has approached the court proactively, even though Tata Sons has yet to formally challenge the RBI’s decision.

However, Noel Tata has already roped in legal firm Cyril Amarchand Mangaldas (CAM) in the RBI matter, said sources.

The RBI’s move marks an unusually assertive step in the corporate dispute and could further complicate Tata Sons’ efforts to retain its private status. The Noel Tata camp believes that there is still room for renegotiation with RBI in the matter, before taking any legal action.