Tata Group stocks experienced a decline on 18 September 2026 following a boardroom dispute at Tata Sons. The majority shareholder, Tata Trusts, declared the reappointment of N. Chandrasekaran as chairman “illegal.” The board had voted 4-1 in favour of extending Chandrasekaran’s tenure for five years, with Noel Tata, chairman of Tata Trusts, voting against the resolution. This disagreement coincided with regulatory pressure from the Reserve Bank of India (RBI) for Tata Sons to comply with listing requirements.According to The Hindu, Tata Trusts stated that the board’s resolution was a “legal nullity” under the Articles of Association, as both nominee directors from the Trusts must vote in favour for such an appointment to be valid. The Trusts reiterated their position that the process for appointing or reappointing a chairman requires unanimous support from its nominees, which was not achieved in this instance.As reported by The Indian Express, former Chief Justice of India D.Y. Chandrachud provided a legal opinion supporting Tata Trusts’ stance. He stated that the affirmative vote of a majority of nominee directors is an independent requirement and cannot be overridden by the chairman’s casting vote. The legal opinion emphasised that the Articles of Association are designed to protect the interests of the majority shareholder and prevent circumvention of governance protections.As highlighted by Financial Express, the schism at the top of Tata Sons has led to public disagreements and uncertainty regarding both ownership control and the potential public listing of the holding company. The ongoing dispute has raised questions about the future governance structure and the timing of any listing, with Tata Trusts maintaining that the company should remain unlisted.Why RBI's Push for Tata Sons' Listing Deserves Greater Scrutiny“The resolution seeking to reappoint Mr. N. Chandrasekaran in the Board meeting today, with four Directors voting in favour, and Mr Noel Tata (chairman, Tata Trusts) against, was a legal nullity in view of the provisions of the Articles of Association of Tata Sons,” Tata Trusts stated.Market data showed that Tata Group stocks were under pressure during early trade, despite broader indices opening steady. The boardroom conflict contributed to negative sentiment, with investors reacting to the uncertainty surrounding leadership and compliance with regulatory directives.In addition, trading indicated that shares of Tata Chemicals fell as much as 7.8%, Tata Investment Corporation dropped 3.9%, Tata Motors Passenger Vehicles declined 2.6%, and Tata Power lost 1.4%. Other group companies, including Tata Steel and Tata Elxsi, also registered losses, while Tata Capital saw a marginal gain.Midway through the session, coverage revealed that the Shapoorji Pallonji Group, the second-largest shareholder in Tata Sons, supported a potential listing and proposed selling a portion of its stake for at least ₹25,000 crore. This development added to the volatility, as the market weighed the implications of a possible change in ownership structure.“A listing will destroy its character and strike at the heart of this principle,” Noel Tata said, expressing opposition to the public listing of Tata Sons.During the board meeting, further details emerged about the Shapoorji Pallonji Group’s offer to sell up to a 3% stake back to Tata Sons for ₹25,000 crore as an alternative to listing. The proposal was presented by Noel Tata and is intended to provide liquidity to the minority investor while addressing regulatory requirements.At the same time, statements confirmed that Noel Tata vowed to veto any immediate IPO decision and suggested seeking a three-year window from the RBI to comply with listing norms, citing the need to preserve the group’s unique ownership structure and charitable mission.Fake Statement About Tata Industries in Singur Attributed to N ChandrasekaranNote: This article is produced using AI-assisted tools and is based on publicly available information. It has been reviewed by The Quint's editorial team before publishing.