The chairman of India’s Tata Sons, N. Chandrasekaran, said on Wednesday 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 conglomerate.
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 had been brewing between Chandrasekaran, 63, and Tata Trusts, which owns 66% of Tata Sons, over the past few months. The two sides have clashed over whether Tata Sons should be listed, the losses at 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%, while Jaguar Land Rover-parent Tata Motors fell 3.5%. Tata Steel and fashion accessory brand Titan each lost about 2%.
Tata everywhere in India
Tata products are omnipresent in India, from salt and pulses to cars and hotels.
In the past financial year, Tata Group companies had combined revenue of $185 billion. The 26 that are publicly listed had a combined market capitalisation of $277 billion as of March 31.
Chandrasekaran joined the Tata Group in 1987 as an intern at
TCS and spent his entire corporate career at the IT giant,
rising through the ranks to become CEO in 2009, before taking
over as Tata Sons chair in 2017.
The Tata family are descendants of Persians who first landed
in India in the eighth century. Chandrasekaran, widely known as
Chandra, is not related to the Tata family and was the the first
non-Parsi chairman of Tata Sons.
The disagreements between Chandrasekaran and the Tata Trusts
were the sole reason for his resignation, said a source with
direct knowledge of his decision, who declined to be identified.
Source: Khaleej Times