Summary of this article
Chandrasekaran steps down amid differences with Tata Trusts over his reappointment
TCS, Tata Motors and other Tata stocks fall up to 5 per cent
Chandrasekaran’s resignation ends his nine-year tenure as Tata Sons chairman
Tata Sons Chairman N Chandrasekaran has resigned ahead of the company’s annual general meeting (AGM) on August 18. Shares of Tata Group companies came under pressure on August 12 after the report.
According to Reuters, Chandrasekaran resigned after failing to get board approval for his reappointment, amid growing differences with Tata Trusts, which owns 66 per cent of Tata Sons.
Tata Sons controls more than 30 companies, including Tata Consultancy Services (TCS), Tata Motors and Air India. Tata Trusts, chaired by Noel Tata, is the conglomerate’s main shareholder.
Tata Group Stocks Under Pressure
TCS shares fell as much as 4.84 per cent to Rs 2,322 apiece on the NSE, while Tata Motors Passenger Vehicle plunged up to 3.86 per cent to Rs 334.20 per share. Jewellery and watch-maker Titan's shares also fell up to 1.72 per cent to Rs 5,025.95.
Tata Consumer Products fell more than 1 per cent to Rs 1,065.40 on the NSE, Titan Company declined 1.1 per cent. Titan shares also Tata Steel was marginally lower, while Tata Chemical, Tata Capital, and Tata Motors Commercial Vehicle were the only Tata Group stocks trading in green, up in the range 0.50-1.50 per cent.
The Nifty India Corporate Group Index – Tata Group 25% Cap Index, which tracks the top 10 Tata companies by market capitalisation, fell as much as 2.5 per cent during the session.
Why Chandrasekaran Resigned
Differences between Chandrasekaran and Tata Trusts had been building over the past few months. The two sides disagreed over board representation, group strategy, losses at Air India and plans to facilitate the exit of the Shapoorji Pallonji Group, which owns an 18 per cent stake in Tata Sons.
Tata Sons had postponed a decision on Chandrasekaran’s reappointment in February after Noel Tata opposed the move.
A source with direct knowledge of the matter told Reuters that the differences with Tata Trusts were the sole reason for Chandrasekaran’s resignation.
Chandrasekaran's Nine Years As Tata Sons Chairman
Chandrasekaran's resignation brings an abrupt end to his tenure and trigger a leadership transition at the Tata Group.
He took charge as Tata Sons chairman on February 21, 2017, after the controversial ouster of Cyrus Mistry. He was the first non-Parsi and professional executive to head the Tata Group.
Before taking over as chairman, Chandrasekaran was the CEO and managing director of TCS.
In February 2022, the Tata Sons board extended his tenure by five years, taking it up to February 2027. If he had completed the term, Chandrasekaran would have spent 10 years at the helm of the Tata Group.
