Why Tata Sons has delayed N Chandrasekaran's reappointment
What's the story
Tata Sons executive chairman N Chandrasekaran has sought a deferment of the discussion on his third-term reappointment. The request came after a disagreement during Tuesday's board meeting, The Economic Times reported. The meeting was attended by all board members, including Tata Trusts chairman Noel Tata and Venu Srinivasan.
Board discussion
Disagreement over new business losses
The disagreement centered on the losses incurred by Tata Group's new businesses. Noel raised the issue during the board meeting, sparking a detailed discussion. However, other board members defended Chandrasekaran's reappointment, attributing these losses to greenfield investments and their required gestation period for maturity.
Process details
Special resolution required for reappointment
Chandrasekaran's reappointment requires a special resolution and an exception to Tata Sons' retirement policy for non-executive roles beyond the age of 65. He is currently 62 years old and will turn 63 in June. Chandrasekaran took over as executive chairman in 2017 and has since led consolidation efforts, balance sheet repairs, and renewed capital allocation discipline at the group.
Conditions outlined
Noel's conditions for reappointment
Noel has reportedly laid four conditions that need to be met before granting reappointment. These include ensuring Tata Sons isn't listed in line with RBI guidelines for upper-layer shadow banks, maintaining no debt in the company, avoiding excessive capital expenditure on high-risk investments, and containing losses from acquisitions like Air India and Big Basket.