N Chandrasekaran, chairman of Tata Group, has announced he will not seek reappointment when his term ends in February. The 63-year-old said the decision came after the board of Tata Sons failed to reach a resolution on a five-year extension of his term.

The news sent shares of listed Tata companies plunging and raised questions about the future of the salt-to-steel conglomerate that owns Air India, Tata Steel, and Jaguar Land Rover.

Chandrasekaran's resignation, announced days before Tata Sons' annual general meeting, highlights tensions that have been playing out for months after a boardroom power struggle among trustees. Reports indicate disagreements over board nominations, funding approvals, and the public listing of Tata Sons.

In his statement, Chandrasekaran said that when the proposal for his extension was brought before the board in February, one member did not support it, though he did not name the person. "In the absence of unanimous support, I chose to defer the decision," he said, adding that no resolution was reached even six months later.

Tata Group has a unique structure: the charitable arm Tata Trusts owns 66% of the parent company Tata Sons. This provides tax and regulatory advantages, but experts note that dual non-profit and commercial objectives sometimes lead to governance issues.

Chandrasekaran was appointed chairman in 2017, succeeding the late Cyrus Mistry, whose abrupt removal had triggered a bitter legal battle. He joined the group in 1987 and was described as a "Tata lifer" in a 2017 press release.

Independent market analyst Ambareesh Baliga said that when a person of Chandrasekaran's stature steps down like this, it is inevitable that markets react negatively. "However, they have six months to find a good successor," he added, suggesting the next leader would likely be chosen from within the group.

Source: www.bbc.co.uk