Tata Sons Names TCS Chief N Chandrasekaran As New Chairman
Tata Sons appoints TCS chief N Chandrasekaran as chairman.
Tata Sons has named Natarajan Chandrasekaran as its new chairman, the company said in a media statement. Chandrasekaran, who is the chief executive officer of TCS, will take over from February 21 as the head of the $100-billion salt-to-software conglomerate from interim chairman Ratan Tata.
Chandrasekaran’s name was recommended unanimously by a search panel, which was set up after Cyrus Mistry’s surprise ouster, to select the next Tata Sons chairman.
“Mr. Chandrasekaran has demonstrated exemplary leadership as the Chief Executive Officer and Managing Director of Tata Consultancy Services. We believe he will now inspire the entire Tata group to realise its potential acting as leaders in their respective businesses, always in keeping with our value system and ethics and adhering with the practices of the Tata group which have stood it in good stead,” Tata Sons said in the statement.
Speaking at a press briefing after the official announcement, the chairman-designate of Tata Sons said, “It is a responsibility and privilege to be appointed to the board of Tata Sons and to be appointed chairman of Tata Sons. You can say many things about the group – pioneer, multiple businesses, running businesses with ethos and values – but most important the group is at the heart of so many people across the country. This position requires several leadership qualities and compassion. I feel I will grow into this role over a period of time."
Rajesh Gopinathan will take over from Chandrasekaran as the next chief executive officer and managing director of TCS.
A Tata Group insider and now its seventh chairman, Chandrasekaran, 53, has been with the group from 1987 when he joined TCS after completing a Master’s degree in Computer Applications from Regional Engineering College, Trichy, Tamil Nadu. He took over as the chief executive officer and managing director of TCS in October 2009. Prior to that, he was the chief operating officer of the company.
He was appointed to the Tata Sons board as additional director in October last year.
Chandrasekaran has also served as the chairman of the industry body National Association of Software and Services Companies (NASSCOM) in 2012-13.
Tata Consultancy Services, in which Tata Sons holds 73.26 percent stake, is the biggest contributor to the group’s revenue.
India Inc Welcomes Appointment
The 80-Day Battle
N Chandrasekaran’s appointment was preceded by a long power conflict between ousted chairman Cyrus Mistry, and Tata Sons, the holding company of the Tata group companies.
The Tata Sons board, on October 24, passed a resolution to remove Mistry as the chairman the company, on the grounds that the board had lost confidence in his abilities. Six members voted in favour of his ouster while two abstained. The group executive committee formed by Mistry to oversee governance was also dissolved.
Chairman Emeritus Ratan Tata took over as interim head for the next four months. The Tata Sons board also set up a 5-member committee to select the next chairman within this period. The selection committee comprised Ratan Tata, Ronen Sen, Amit Chandra, Lord Kumar Bhattacharya and Venu Srinavasan.
This triggered one of the most vicious corporate battles witnessed in the country, with Mistry refusing to vacate his position on the boards of various Tata group companies. Both parties traded accusations in the following eight weeks. A few independent directors of Tata companies got involved, affirming their full faith in Mistry.
This led to Tata Sons, the principal shareholder of Tata Group companies, requisitioning extraordinary general meetings for removing Mistry from the board of the companies. Tata Sons also sought the removal of Nusli Wadia, independent director on the board of three Tata companies, who had backed Mistry.
On December 13, Tata Sons scored its first boardroom victory after shareholders voted to remove Mistry from the board of Tata Consultancy Services in the first such EGM.
On December 19, Mistry announced his resignation from the board of all six listed Tata companies, but said he would continue to be a board member of Tata Sons, in which his family owns 18.2 percent stake.
The battle then shifted to the country’s courtrooms. Two investment firms run by the Mistry family approached the National Company Law Tribunal in December last year, alleging mismanagement by Tata Sons. The tribunal asked Mistry to provide more documented evidence to prove alleged fraud and malpractice at Tata Sons. The case is pending, with the next hearing scheduled for January 31, 2017.
Wadia too filed a criminal defamation suit on December 23, 2016, saying that Tata Sons had defamed his reputation by printing and publishing “false, frivolous, baseless, incorrect, libellous and defamatory material”. The case is likely to be heard in March
Tata Sons has also convened an EGM for Mistry’s removal from the board of the holding company. The meeting is scheduled for February 6, 2017.