The board of Tata Sons deferred a decision on the re-appointment of Natarajan Chandrasekaran for a third term as chairman, signalling potential differences within the holding company of the coffee-to-cars-and-software conglomerate.

According to sources, Noel Tata, the chairman of Tata Trusts, which owns two-thirds of the corporate grouping, set a slew of conditions for the reappointment of Chandrasekaran, which ultimately led to the decision being deferred.

Chandrasekaran’s term ends in February 2027, and the board of Tata Sons was discussing extending the same when a set of conditions was put forth by Noel Tata on Tuesday.

They said Noel Tata raised concerns about losses in certain group companies, and the conditions also include that there should be no addition of debt by Tata Sons, which would invite a situation where the group is forced to list on bourses. Sources said Noel Tata was also not in favour of the listing of Tata Sons and wanted a written commitment.

The meeting, held at group headquarters Bombay House, was a long one, and the agenda item on reappointment was discussed at length. Sources added that none of the four other directors, including Venu Srinivasan, Harish Manwani, Anita George and Saurabh Agrawal, had any issues with it.

According to sources, Chandrasekaran explained the challenges in making a firm commitment on the listing, explaining that the regulations will have to take its own turn.

Chandrasekaran, 62, received the backing of several board members who felt the losses at one group firm should not eclipse the group’s overall performance or the chair’s contribution over the years.

When Anita George, chairman of the nomination and remuneration committee, called for a vote, Chandrasekaran urged a deferral.

“I recommended that it should be deferred because that was the request by one of the directors,” Chandrasekaran told reporters while emerging from the building in the evening. Declining to specify what transpired at the board meeting, he said “nothing changes” for Tata Sons.

Sources said Chandrasekaran wanted a consensus in the board meeting on his reappointment and to avoid a voting. Moreover, board decisions are not sacrosanct, as the resolutions passed needed to be approved by the shareholders at the general meetings. If Tata Sons representative was to vote against a board resolution, it would fail to pass in the AGM/EGM.

As a result, the backing of Tata Sons would be crucial to carry any board resolution to be effective, including the chairman’s reappointment.

With inputs from PTI