Mr Sarna was appointed to lead IHCL on September 1, 2014, taking over from the Tata group hospitality firm's long-serving chief Raymond Bickson.
With over three decades of experience across various leadership roles with Hyatt Hotels Corporation, Mr Sarna is one of the high-profile appointments from outside the Tata group made by Cyrus Mistry. With the latter's departure, there were speculations that Mr Sarna was also likely to follow suit.
"The Indian Hotels Company Ltd and Tata Sons wish to reiterate that reports about the exit of Mr Rakesh Sarna, Managing Director and CEO of Taj Hotels, Resorts and Palaces, are completely baseless and unfounded," the two companies said in a joint statement.
According to Mr Mistry, beyond flawed international strategy, IHCL had acquired the Searock property at a highly inflated price and housed in an off-balance sheet structure.
"In the process of unraveling this legacy, IHCL has had to write down nearly its entire net worth over the past three years. This impairs its ability to pay dividends," he had said in the letter a day after he was sacked as chairman of Tata Sons.