The Tata Group
The Times of India
ii) The turnover and market capitalisation of the Tata Group, 1991-2016, under Ratan Tata and Cyrus Mistry.
iii) The performance of Tata companies under Cyrus Mistry, 2012-16.
The Times of India
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The Tata group
Chairman, SDTT was always Chairman, Tata Sons: till Mistry
A Diarchy? Ratan Tata Continued To Run Trusts
Sir Dorab Tata, who succeeded the founder of the Group, Jamsetji Tata, as chairman of Tata Sons, set up Sir Dorabji Tata Trust (SDTT) in 1932. Since then, every Tata Sons chairman -Sir Nowroji Saklatvala, J R D Tata and Ratan Tata -has also been chairman of the Trust.Ratan Tata became chairman of SDTT in 1995, four years after he took over as chairman of Tata Sons following JRD's death. He'd already become chairman of the Sir Ratan Tata Trust, the other principal Tata Trust, in 1988.
So, as long as the chairman of Tata Sons was also chairman of either or both the big Tata Trusts, there was little room for conflict; they were one and the same.
Cyrus Mistry was the first Tata Sons chairman in the history of the Group not to be made chairman of the Sir Dorabji Tata Trust (SDTT) which, together with the Sir Ratan Tata Trust, holds the bulk of the 66% that gives the Tata Trusts near-absolute control of the holding company of the Tata Group.
The two positions were decoupled when Mistry became head of Tata Sons while Ratan Tata retained his position at the Trusts. This created a diarchy and sowed the seeds for potential discord over style andor substance, according to a number of promoter-chairmen and professional CEOs TOI spoke with, some of whom didn't wish to be identified speaking even indirectly on the showdown at Bombay House.
Said one of them, “I cannot speak to what happened or who's at fault. But one thing is clear: there was an asymmetry in the power equation. Tata Trusts was, and is, effectively the promoter while Mistry was essentially an executive.“ The fact that Mistry was the first chairman of the group who is not a Tata either by birth or marriage could be a reason why he was not considered for chairmanship of the Trusts, said an old-timer.Or it could have been because of his relative youth, and in time he may have been given dual charge, this person added.
Harsh Mariwala, promoter-chairman of Marico, told TOI, “One would reckon there was no clarity on the roles between the two (the chairmen of Tata Sons and Tata Trusts).Even though these roles are separate both sides need to be well aligned. If Tata Sons wants a professional CEO, clarity on all aspects is a must.Even if there were any differences between the two, these should have been reconciled through interventions.“
“In politics, there have been situations like Sonia Gandhi and Manmohan Singh, and Bal Thackeray and the Sena-nominated CM for Maharashtra.The Sonia-Manmohan relationship worked for 10 years because there were no illusions as to who wielded the real power.There may have been the occasional disagreement, but there was also mutual respect and trust -and yes, maybe even an element of submissiveness. If and when that breaks down -whether in politics or in business -there's bound to be trouble,“ said the chairman of a blue-chip multinational. “With Ratan Tata remaining chairperson of the Tata Trusts and Cyrus Mistry chairing Tata Sons, there was a dual power structure. Such duality blurs the lines of accountability and creates confusion in the rank and file.Going forward, the group needs to communicate how it proposes to handle the disconnect between the two roles (of leading the Trusts and Tata Sons),“ said Amit Tandon, founder and MD of IiAS (Institutional Investor Advisory Services), which advises on corporate governance and shareholder rights.
According to Vineet Nayar, who was CEO of HCL Technologies, Mistry started off on a weak wicket. “Consider Tata Trusts to be like the executive chairman of an organization, and Tata Sons as CEO. With the powers vested in Tata Trusts, Mistry did not have the powers a normal chairman of a board would have. We do not know if he ever objected to this diluted power situation impacting his ability to impact results of the listed entities where he is chairman,“ he said. “There's no guarantee this won't happen again with the next chairman if there's no clarity on roles and responsibilities,“ said the CEO of a large company .
Harsh Goenka, chairman of RPG Enterprises, said, “Cyrus should have aligned with Ratan Tata who has run the company for so long and is well respected. Considering that Tata Trusts has a large shareholding in Tata Sons, Cyrus should have kept Ratan Tata on the right side.“
Mariwala said, “These are more in the realm of relationship alignment and capability issues...When I stepped down as MD at Marico and handed over day-to-day charge to Saugata Gupta, I gave in writing the role the MD would play and under what circumstances he would consult me or the board. Similarly , Saugata gave in writing what he would do and what he expected from me. Everything was crystal clear, leaving no scope for ambiguity . Given the complexity of handling a group like Tatas, the chairman should have been coached by a top-notch global coach.“
Asked to comment on Mistry's allegations that a board meeting would be kept on hold while directors went out to get instructions from Tata, Mariwala said, “This is not how boards should function.“ The day after he was sacked, Mistry had said in his letter to the Tata Sons board and Tata trustees, “Prior to my appointment, I was assured that I would be given a free hand.The previous chairman was to step back and be available for advice and guidance as and when needed. After my appointment, the Articles of Asso ciation were modified, changing the rules of engagement between the Trusts, the board of Tata Sons, the chairman, and the operating companies. Inappropriate interpretation indeed followed, and as elaborated below, it severely constrained the ability of the group to engineer the necessary turnaround.“
Tata Sons has strongly contested this charge and said Mistry was “fully empowered“ and given “complete autonomy“.
A number of CEOs and HR specialists said the contours of the Tata Sons-Tata Trusts relationship left considerable room for ambiguity and might discourage globally-recognised managerial talent from wanting to head the conglomerate. “There's certainly enormous prestige, but power to effect real change?“ asked the HR director of an Indian conglomerate.
IiAS's Tandon said, “The group must put in place wellarticulated roles, responsibilities and rights, for the structure to work seamlessly . Given its stature, it is responsible and accountable to a much wider set of stakeholders.“
How Tata Sons board changed in 4 yrs
Mumbai: Before the change of guard at Tata Sons in December 2012, the Articles of Association (AoA) relating to appointment and removal of future chairmen were revised. Under the revised rules, Tata Trusts tightened its grip on the Tata Sons board by making it mandatory to seek approval of all directors nominated by the Trusts for appointment or removal of the chairman. The two main trusts, Sir Dorabji Tata Trust and Sir Ratan Tata Trust, were also jointly given the right to nominate one-third of directors on the Tata Sons board. The AoA were amended with the consent of the Mistry family which owns 18.5% of Tata Sons. However, back then it was not known that Mistry, who was a director on the Tata Sons board, would eventually be elevated to head the company.
After Mistry became chairman in December 2012, the character of the Tata Sons board changed. Following the retirement of a number of top Tata executives, Harvard Business School dean Nitin Nohria and former defence secretary Vijay Singh joined the board as Tata Trusts' representatives, while Farida Khambata, a financial strategist, and Ronen Sen, former Indian envoy to US, came in as independent directors.
Ishaat Hussain, who had worked under Ratan Tata, continued as director. This was the arrangement till August 2016, barely months before Mistry was sacked, when more directors were nominated, altering once again the composition of the board. TVS chairman Venu Srinivasan was brought in as a residual director, industrialist Ajay Piramal as independent director, and Amit Chandra, Bain Capital MD and brother-in-law of Nitin Nohria, as a representative of Tata Trusts.
The group as in Oct 2016
AFP | Oct 25, 2016 Steel to salt: 10 key facts about Tata Group
India's largest conglomerate Tata Sons is back in the hands of Ratan Tata after the sudden sacking of Cyrus Mistry. Here are key things you need to know about the Indian giant.
1. It is arguably India's most famous family conglomerate. Established by Parsi industrialist Jamsetji Tata in 1868, the sprawling steel-to-salt conglomerate is now worth more than $100 billion and operates in more than 100 countries globally. Tata Sons is the holding company of the Tata Group.
2. There are very few areas into which Tata has not ventured, with the group dealing in everything from salt and tea to watches, luxury cars and opulent five-star hotels.
3. Its most high-profile companies are India's largest carmaker Tata Motors, which owns Britain's Jaguar Land Rover, the IT outsourcing giant Tata Consultancy Services (TCS), Tata Steel, Tata Global beverages and Tata Chemicals.
4. The Tata Group is also in telecommunications through its company Tata Teleservices while its hotel chain runs Mumbai's Taj Mahal Palace and other high-end establishments.
5. Tata's tentacles have stretched across the globe in recent years as it went on a buying spree, picking up a number of major names including Britain's Tetley Tea and the Anglo-Dutch steel firm Corus.
6. Ratan Tata, the media-shy septuagenarian, has taken interim charge, four years after making way for Mistry, and is leading the hunt for a new successor.
7. Tata took the reins of the group in 1991 and led it for 21 years during which he was credited with driving its expansion abroad in the 2000s.
8. Each Tata company operates independently and has its own board of directors answerable to shareholders. Notable CEOs include Guenter Butschek at Tata Motors and Natarajan Chandrasekaran of TCS.
9. Like many businesses, it's facing major headwinds in the form of the sluggish global economy, volatile currencies and fluctuating commodity prices. Tata Group's revenue slipped 4.6 percent for the financial year ended March while a number of its firms have their own problems. Tata Steel is the most notable. It's struggling to find a buyer for its huge loss-making British assets, with 15,000 jobs in the UK at risk, while TCS profits are down as clients tighten their purse strings.
10. Tata Motors is also bearing the brunt of weak sales of its luxury unit Jaguar Land Rover, while Japanese mobile services provider NTT Docomo is demanding Tata coughs up a $1.17 billion arbitration payment awarded at an international hearing.
The Times of India
The Times of India
The Times of India
Partha Sinha & Reeba Zachariah, Cyrus owns Rs 1,000cr TCS shares, Nov 02 2016 : The Times of India
Cyrus Mistry , the ousted chairman of Tata Sons, holds nearly Rs 1,000crore worth of stocks of Tata Consultancy Services (TCS), the crown jewel within the Tata Group, the software major's annual report showed.Mistry also holds small stakes in other group companies -Tata Motors, Indian Hotels, Tata Global, Tata Chemicals and Tata Power -company filings showed. He's still the chairman of all these and some other group companies.
The stocks owned by Mistry is in addition to the 18.5% stake that his family , Shapoorji Pallonji (SP) Group, holds in Tata Sons, the Tata Group's holding company .Going by the value of stakes held by Tata Sons in the group's listed entities, and calculating SP group's stake on a pro-rata basis, the worth of SP Group's holding on November 1 was Rs 81,140 crore. Of this, SP Group's stake in TCS itself is worth Rs 63,158 crore, that is more than three-fourths of the total value. Other companies which contribute substantially to the value of holding by Mistry's family in Tata Sons are Tata Motors (Rs 7,983 crore), Tata Communications (Rs 1,500 crore), Tata Steel (Rs 2,279 crore), Titan (Rs 1,281 crore) and Tata Power (Rs 1,234 crore).
Other than direct holding in 15 listed companies, Tata Sons has indirect control over several other listed companies in which it holds stakes through group companies.For example, Indian Hotels holds controlling stake in Oriental Hotels and Benares Hotels, while Tata Steel controls Tata Sponge Iron and Tata Chemicals holds majority stake in Rallis India.
Tata Group also holds majority stakes in several unlisted companies through Tata Sons, which have not been valued.
LIC: the largest institutional investor
LIC likely to back board decisions, Nov 02 2016 : The Times of India
The stake of the Life Insurance Company of India in Tata group companies, Nov. 2016 Nov 02 2016: The Times of India
PSU Largest Institutional Investor In Tata Group Cos
Life Insurance Corporation (LIC) is the largest institutional investor in the Tata Group with stocks worth about Rs 37,000 crore. The life insurer has substantial minority stakes in Tata Steel (13.6%) and Tata Power (13.1%).
Tata Sons holds 31.35% in steel major and 33.01% in the automobile maker. LIC also holds 9.8% in Tata Global Beverages, 8.8% in Indian Hotels and 7.1% in Voltas. Historically, LIC has played a passive role in promoter-led companies and has been relatively more active in professionally managed companies without any identifiable promoter such as L&T, Axis Bank and ITC.
Despite having a large stake, LIC does not have a board position in most of the companies. However, former LIC chairman D K Mehrotra is on the board of Tata Steel.
LIC acting chairman V K Sharma was one of the few institutional investors that Ratan Tata had met after the ouster of Mistry .
Indian institutions had not interfered even in the '90s when Ratan Tata consolidated his control over the group.
Noel Tata joins Tata Trusts board
Tata Trusts, which controls India’s largest conglomerate, the Tata Group, has inducted chairman Ratan Tata’s half-brother Noel Tata, 62, on the board. The appointment is seen as paving the way for a potential successor to the present chairman.
Speculation about Noel’s entry has been gathering steam with the small but prominent Parsi community rooting for a Tata family member to helm the Trusts in the future. TOI had reported on the likelihood of Noel, who is chairman of Trent and MD of Tata International, finding a seat on the board of the Trusts, in its December 13, 2018, edition.
Noel had backed Ratan Tata in battle against Cyrus Mistry
With trustees having no retirement age, Ratan Tata, 81, is expected to continue as chairman. The appointment of Noel, 62, however, comes at a time when the Trusts is battling allegations of income tax law violations, and managing trustee R Venkataramanan steps down. (TOI had reported his impending exit on Feb 8.) With Noel’s induction, all three Tata brothers are now on the board of the Trusts, which disbursed Rs 1,200 crore in fiscal 2018 for philanthropic projects. Ratan Tata’s younger brother Jimmy has been a trustee for nearly three decades.
Several Parsis, including trustee Noshir Soonawala, are believed to have expressed concern to Ratan Tata over the lack of representation from the community on the board of the Trusts, which has played a key role in the social sector besides being at the forefront of Indian industry through the $111-billion saltto-steel Tata group. Jehangir H Jehangir, a fellow Parsi and philanthropist spearheading the Jehangir Hospital in Pune, was also appointed on the board on Wednesday.
The low-key Noel Tata who makes his entry on the Tata Trusts board, has been rarely seen with its present head Ratan Tata. His interactions with Ratan Tata despite his role as a group director have been limited. However, in the recent past their equations have changed. “At the Tata leadership summit last July, Noel and Ratan Tata went back home together in the same car,” said a Tata executive.
Noel had also backed Ratan Tata in the battle against Cyrus Mistry, former group chairman and his brotherin-law. Ratan Tata is also known to be close to Noel’s three children, who work in the conglomerate.
While heading Tata International, the smaller among group companies, Noel has found mention as a possible contender for the Tata Sons chairman’s post. His entry into the Trusts would now be the most prominent role he has been cast in. According to Tata Sons’ Articles of Association, Trusts can nominate one-third of directors on the holding company’s board. There is speculation that Noel may soon represent Trusts’ interests on Tata Sons board as well.
Noel’s entry coincides with Venkataramanan (Venkat), who has been overseeing the Trusts’ operations for the last five years, exiting. The announcement did not name a replacement for Venkat.
Speculation is that R Pavitra Kumar could be given interim charge as CEO of the Trusts. Venkat has been under the Income Tax department’s scrutiny for noncompliance of rules.
The department withdrew tax exemptions of the Trusts on account of Venkat’s salary that ran into a few crores, stating that the income drawn by the managing trustee was beyond the permissible limit under the rules.
The department had sought to cancel Trusts’ licences for non-compliance of rules on usage of funds. Some time ago, Venkat was also named in a corruption case by CBI for allegedly breaking rules to obtain a flying licence for Air Asia India. He is expected to be shifted into another role within the Tata group.
With Noel’s induction, all 3 Tata brothers are now on the board of the Trusts, which disbursed Rs 1,200cr in 2018 for philanthropic projects
2019 Feb: changes in the Tata Sons board
Bain Capital MD Amit Chandra and former Indian ambassador to the US Ronen Sen are exiting the board of Tata Sons, the holding company of the $111-billion Tata conglomerate.
Chandra and Sen will be the latest to quit the board of Tata Sons after Nitin Nohria and Vijay Singh, who stepped down last year. The Bain Capital MD represented controlling shareholder Tata Trusts’ interest on the holding company’s board, while Sen is an independent director.
On November 20, 2018, TOI had reported that Chandra had stepped down from the Trusts’ board and that he also planned to relinquish his position at Tata Sons. Chandra has been cutting down his assignments to increase focus on his own philanthropic activities.
On the other hand, Sen will be stepping down from Tata Sons in line with the company’s retirement policies. The board took note of the developments at its meeting on Friday. Chandra and Sen had voted in favour of Cyrus Mistry’s removal as chairman of Tata Sons in October 2016. Mistry’s removal had triggered a controversy at the conglomerate, dragging the two into it.
Following the two exits, the strength of the Tata Sons board has now been reduced to eight members. Since Tata Sons has changed its status from a deemed public limited company to a private limited company, it can have a minimum of two members and a maximum of 15 directors with liabilities.
However, the Trusts would want to have one third of Tata Sons’ board members to be its representatives in accordance with the holding company’s Articles of Association as crucial proposals like acquisitions and investments require majority support of the nominee directors of the Trusts. Three days ago, Trusts inducted Noel Tata and Jehangir H Jehangir on its board and speculation is that both or either of them could be appointed on the holding company’s board as well in the future.
Aviation
1952-2018: a brief history
1952-2018: a brief history
From: Reeba Zachariah & Boby Kurian, Tatas in talks to pick up stake in struggling Jet?, October 18, 2018: The Times of India
See graphic:
The Tatas in Aviation
1952-2018: a brief history
Nataraja Chandrasekaran, 2017-
Tata Consultancy Services CEO Nataraja Chandrasekaran was in Jan 2017 named the new Chairman of Tata Sons, the holding company of the $103 billion Tata Group.
A five-member panel comprising Ratan Tata, TVS Group head Venu Srinivasan, Amit Chandra of Bain Capital, former diplomat Ronen Sen and Lord Kumar Bhattacharya, was constituted in October to shortlist candidates for the position, the Economic Times reported.
N Chandrasekaran had been the CEO and Managing Director of Tata Consultancy Services since 2009. Since October 2016, he had also served on the board of Tata Sons.
DoCoMo
The Tatas’ legal battle, 2014-16
Mistry questioned original DoCoMo deal after sacking, Nov 02 2016 : The Times of India
Tata Sons and DoCoMo have been in a legal battle since the end of 2014 over the amount of money the Tatas have to pay DoCoMo for the Japanese telecom major to exit the joint venture. After Mistry was removed, media reports had quoted Tata sources to say that he was coming in the way of an amicable settlement with DoCoMo.
The eight-point statement begins by saying, “Insinuations that the DoCoMo issue was handled under the watch of Mistry in a manner inconsistent with Tata culture and values are baseless. The suggestion that Ratan Tata and the trustees would not have approved of the manner in which the litigation was conducted is contrary to what transpired.“
It goes on to say ,“A number of discussions on the Docomo situation had been held in the Tata Sons board. Mr Mistry had always mentioned that the Tatas should honour all commitments within the law . This stance is based on Tata Sons' board view and was always consistent with the series of board meetings in which the Docomo is sue was discussed.“ Mistry's office said that the agreement with DoCoMo was executed before he became the chairman of the Tata Group. In 2009, when Ratan Tata was chairman of Tata Sons, the company brought in the Japanese telecom major as a partner in Tata Teleservices. DoCoMo had paid $2.6 billion for a 26.5% stake in Tata Teleservices.
After Mistry was ousted, he, in a letter to the board of Tata Sons on October 25, had criticised the original partnership structure of the venture with DoCoMo and said it raised “several questions about its appropriateness from a commercial or prudential perspective wit hin the then prevailing Indian legal framework“.
In January 2015, DoCoMo had moved courts after Tata Sons said that Indian laws did not allow it to buy back the Japanese company's stake at a pre-agreed price of $1.2 billion.In June 2016, DoCoMo won a $1.2 billion arbitral award from a London court and moved courts to enforce the award in India, US and UK jurisdictions.Later, Tata Sons deposited $1.2 billion with Delhi high court.
Mistry's statement added that the Tatas had requested DoCoMo to join them in seeking the approval from Reserve Bank of India, but the Japanese company did not agree.
Flashpoints
Reeba Zachariah, Small shareholder, board ties in focus, July 10, 2018: The Times of India
From: Reeba Zachariah, Small shareholder, board ties in focus, July 10, 2018: The Times of India
NCLT’s Dismissal Of Mistry Petition May Impact Investor-Backed, Closely Held Cos
The National Company Law Tribunal’s dismissal of the plea by ousted chairman Cyrus Mistry against Tata Sons on Monday has put the spotlight on the relationship between promoters, boards and minority shareholders.
The NCLT, among other things, has said that the Tata Sons board was “competent” to remove its executive chairman Mistry and that Ratan Tata and others didn’t act as shadow directors. The order, unless dismissed by a higher court, would have a bearing on closely held companies where private equity and venture capital investors are minority shareholders, and newage startups that are increasingly managed by the board.
A broad swathe of industry observers and corporate governance experts agreed with the verdict that the board is entitled to remove its chairman and that shareholders have the right to remove him/ her from the company’s directorship, while some are questioning the definition of ‘competence’, especially if it becomes a precedent-setting order.
Sanjay Asher, partner at legal firm Crawford Bayley, said, “In a corporate democracy, majority rules — which means majority members of the board can remove the chairman and majority shareholders can strip him of his directorship.”
Shriram Subramanian, MD of shareholder advisory fir m InGover n, said, “It is not clear on what basis the competency of the board is decided, as any board member of any Indian company can then be said to be competent to take action. All mismanagement and oppression issues would have been perpetrated by competent managements and boards.”
The NCLT, according to industry experts, hasn’t touched upon board deliberations and the outcome of those. Sandeep Parekh, former Sebi director and now founder of Finsec Law Advisors, said, “The tribunal seems to have ignored the elephant in the room — fiduciary duties of directors. For example, how did a Tata Sons board, which gave excellent rating to its chairman less than three months ago, suddenly find his performance inadequate, especially when new directors had just joined the board.”
Parekh added, “In any case, other serious issues like insider trading and relatedparty transactions will be looked into by Sebi as the NCLT does not have jurisdiction over those.”
Market capitalisation
Titan, Tata Steel, Tata Motors: 2008-2018
Avik Das & Sujit John, GST, local themes put Titan on fast track, June 19, 2018: The Times of India
From: Avik Das & Sujit John, Bhaskar Bhat, GST, local themes put Titan on fast track, June 19, 2018: The Times of India
Bhaskar Bhat has had a great career at Titan, rising to be the Tata Group company’s MD in 2002, and building it into an over $2-billion revenue entity. But even by those standards, last year must have been special.
The jewellery-andwatch firm’s top line grew 21% and net profit jumped 53%, a performance that sent its share price soaring, taking its market cap to $12 billion, a little behind Tata Motors ($13.3 billion) and ahead of Tata Steel (9.4 billion). Ten years ago, Titan’s market cap was a quarter of Tata Motors’ m-cap and less than 10% of Tata Steel’s. And in November, in a recognition of Bhat’s success and contributions, the 64-year-old was elevated to the board of directors of Tata Sons, the holding company that controls India’s largest conglomerate.
When we ask Bhat about it, he modestly acknowledges the company had a very good year. “You know that. Competition has kind of got demolished jewellery primarily, but in all segments, for all unorganised businesses.” GST, demonetisation, and the Nirav Modi/Mehul Choksi episodes have all worked to the benefit of Tanishq, Titan’s jewellery brand. It accounts for 83% of Titan’s overall income, and grew by over 24% last year. Many of India’s jewellers have dealt in cash, avoided paying taxes, and have been conduits for those who wanted to launder black money. But the government is cracking down on efforts to convert black money into gold — by insisting on a PAN card for gold transactions above Rs 2 lakh, and keeping a closer watch on jewellers’ transactions. “Customers are even getting scared of being caught on camera (dealing in cash at stores),” says Bhat.
This, combined with the introduction of GST that makes transparent accounting more imperative, has made plain gold jewellery no longer very remunerative for small players, and more so because it is a very low-margin business. Banks, too, have become wary of lending to jewellers following the Nirav Modi scandal. Consequently, business is moving to organised players like Tanishq.
Watches, which Titan began with and became almost a monopoly at one point — demolishing incumbent HMT, is now a fraction of the jewellery business, but nonetheless a growing one. Mobile phones have become timekeepers for many. So Titan has focused on making watches cool, a fashion accessory a positioning that has worked especially with the young.
“Today, it has gone beyond even just good looks. There has to be some meaning attached to it. For example, I wear a different watch every day. Today I wore this mechanical watch because this director was coming — he’s an engineer. It’s a conversation piece,” Bhat says.
The effort now is to increase the extent of “smartness” in every watch — a lesson many have learnt from Apple, which has become the world’s biggest watchmaker. Titan will not give up its analogue legacy (moving hands on the clock face). But it will introduce some of the most relevant digital features, such as fitness measurements, into watches.
Asked about Titan’s newest business, the sari brand Taneira, Bhat says it’s still too small to even call it a business. “I can call it a business when it hits Rs 100 crore,” he says, but adds that the concept has been accepted well. Taneira’s value proposition is ‘India under one roof’. “We think it will do well because the India story is seeping into Indians,” says Bhat. “They are seeking a strong Indian identity.”
Cyrus Mistry, 2012-16
See the page Cyrus Mistry
Jimmy Tata
Jimmy, Ratan Tata's Reclusive Younger Sibling, Opens Up To TOI And Shares His Copious Correspondence With Bombay House
This is a tale of the other brother. While reams of newsprint and countless TV hours have been dedicated to one, the other has never made it to the headlines.Not many are even aware of his existence. For most of his 76 years, Jimmy Naval Tata has lived in the shadow of his larger-than-life older brother, Ratan Naval Tata.
A shareholder in Tata Sons and several other Tata companies, the reclusive Jimmy is a trustee of Sir Ratan Tata Trust, a position he inherited after his father Naval died in 1989 in accordance with his will. Naval was originally not a Tata; he was born in a middle-class Parsi family and was adopted by Sir Ratanji Tata's wife Navajbai after his father died.
Barring his trusteeship, Jimmy has no role to play at Bombay House -the epicentre of the war between Ratan Tata and Cyrus Mistry .
But from his spartan 2BHK apartment on the sixth floor of Hampton Court in Colaba, he has kept track of every little twist and turn at India's largest conglomerate, almost to the point of obsession.
He doesn't own a mobile phone and he does not have a secretary . Newspapers seem to be his window to the outside world. He writes in flowing long-hand and his signature bears a certain resemblance to Ratan Tata's. A TV sits, covered in cloth, in one corner of his living room.The walls are lined with files and large, dusty suitcases.
When asked for his views on the ongoing war, he hands over six bulging files and says, “Whatever you want to know about me and my opinions is in here.“ The files, which are in our possession, contain hundreds of pages of hand and typewritten letters to the trustees of Sir Ratan Tata Trust and the board of Tata Sons over many years -right up till Nov 18, 2016. They convey his unhappiness over a range of decisions, including the appointment of Harvard Business School dean Nitin Nohria to the board of the Tata group's holding company about three years ago.
There is a July 2015 letter from him to Tata Sons -according to which he holds 3,262 ordinary shares -with a subject line, `In case of liquidation of Tata Sons Ltd', where he has estimated the break-up value at more than “Rs 10 lakh croreshare“. Every page of every letter sent and received is rubberstamped with his name and address. Many of them point to strained relations with the people at the helm of the group that bears his family name.
Also in the files are countless newspaper clippings -related mostly to the Tata Group -accompanied by sharp, caustic comments. Jimmy told TOI that he started his career with the Tata Group under his father in the textile business, which subsequently ran into rough weather. Jimmy and Ratan have a half-brother Noel, from Naval Tata's second wife Simone. Noel is MD of Tata International and chairman of Trent, and brother-in-law of Cyrus Mistry , and there's been speculation in the media about his chances of being named the next chairman of Tata Sons.
People working in the building where Jimmy lives said the bachelor rarely steps out and is extremely wary of opening the door to visitors. TOI visited him twice, and only after a close examination of our ID cards did he let us in.
Jimmy , who also owns shares in TCS, Tata Motors, Tata Steel, Tata Chemicals, Indian Hotels and Tata Power, said he had never voted on any resolution of the Tatas and had, right from the beginning, decided to abstain from the extraordinary general meetings to remove Cyrus.
When asked whether he would, like the group's founders, leave his estate to a trust after his death, pat came the reply , “Let them fight it out just as they are fighting now“.
Leah, Maya and Neville
Kala Vijayraghavan & Megha Mandavia, Jan 21, 2017: The Times of India
Generation Next has been making quiet progress in the $103-billion Tata Group. Leah, Maya and Neville, the children of Noel Naval Tata, Ratan Tata's half-brother, are working their way up in group companies just like other professionals, senior officials familiar with the matter said.
Leah, the eldest, is with Indian Hotels Company, the operator of the Taj group of hotels. Younger daughter Maya works as an analyst at Tata Capital, the flagship financial services company. Neville is with retail chain Trent, which his father helped build. Their presence in the group has been kept under wraps for a while and little information is available in the public domain. They've been so discreet in the workplace that many of their colleagues probably don't even know about their lineage.
All three have graduated from institutes in London and Spain, a senior official said. Leah did a Masters in marketing at the IE Business School in Madrid, according to her LinkedIn profile.
Aged between early 20s and early 30s, they are quiet and extremely well-behaved, have no hang-ups and are keen to work their way up the ladder, according to a senior official. The low-profile and mediashy Noel Tata, who is chairman of Trent and managing director of Tata International, has insisted that they shouldn't get any preferential treatment, officials said. "Their father has given clear instructions to the respective organisations that they should be treated as regular employees," said an official.
"They do not mention their surnames and have merged into the system," a top official said. Noel Tata did not respond to an emailed questionnaire until press time. Leah, Maya and Neville have each been assigned to a business in which they have shown interest. Leah has spent most of the past 10 years with Indian Hotels, except for a three-month stint in 2010 when she interned with Louis Vuitton. She started her career as assistant sales manager at the Taj Hotels Resorts & Palaces in 2006 and is now assistant manager - development.
Neville manages hyperlocal food at Trent, the operator of Westside, Star Bazaar and Landmark stores, which has a joint venture with Tesco. "He has been given the challenge of fixing that part which is still not making a lot of money," an official said. "All of them are bright, humble and hardworking and will be great managers." Another senior official said Noel Tata wanted them to be exposed to all aspects of business and learn the ropes.
"He did not want them to make the same mistake he did of being confined to certain parts of the business," another official said. "Possibly, Noel is making sure they have enough exposure." Ratan Tata, when asked about a successor for the Tata Group, had said in an interview in 2011 that Noel Tata was not ready for the responsibility. He said that Noel Tata should have had "greater exposure than he has had".
"All successful family businesses ask their children to work in different business segments before their growth is accelerated," said Kavil Ramachandran, executive director of the Thomas Schmidheiny Centre for Family Enterprise at the Indian School of Business in Hyderabad. "But Tatas are not like any other promoter family... they are not trying to make wealth for the family. The children will reach the top only if they are good. I don't think they see themselves as successors."
Noel Tata's name frequently came up among the internal candidates shortlisted for the role of Tata Sons chairman, both when Ratan Tata stepped down in 2011 and when Cyrus Mistry was sacked in October. Not much is known about their family equations. Noel Tata is son of Naval H Tata and his second wife Simone. He is married to Aloo Mistry, the sister of former Tata Sons chairman Cyrus Mistry. While Cyrus Mistry and Noel Tata are known to have a cordial relationship, their interaction at board meetings chaired by Mistry was minimal.
Overseas takeovers
As in 2016
See graphic
As in 2006
[ 20 Oct, 2006 PTI ]
Snapshot of Tata Group's takeovers abroad
NEW DELHI: Tata Steel's successful move to acquire its much bigger rival Corus Group is the latest in a series of takeovers abroad executed by India's largest and one of the oldest corporate groups.
The acquisitions have meant that 30 per cent of the group's revenues today come from overseas operations.
Following are the major acquisitions by Tata Group companies in the past few years:
- Tata Tea acquires 30% in US' Glaceau (Energy Brands) in August 2006 for $677 mn
- Tata Tea buys 33 per cent in South African tea company Joekels through its subsidiary Tetley Group
- Tata Tea acquires US-based Eight'O clock coffee company for $220 mn (Rs 1,050 cr) in June 2006
- Tata Chemicals picks 63.5% in UK's Brunner Mond Group for Rs 508 crore in December 2005
- Tata Steel acquires Millennium Steel of Thailand in December 2005 for $404 mn (Rs 1,800 crore)
- TCS buys out Chilean BPO firm Comicorn for $23 mn (Rs 107.02 crore) in November 2005
- TCS acquires Sydney-based FNS in October 2005
- Tata Technologies purchases INCAT International, UK in October 2005 for $91 mn (Rs 411 crore)
- Tata Tea acquires Good Earth Corp in October 2005 for around $32 mn
- Tata Auto Comp (TACO) takes over German auto components maker Wundsch Weidinger
- VSNL acquires Teleglobe International in July 2005 for $239 mn
- Tata Steel buys Singapore's NatSteel in August 2004 for over Rs 1,300 crore.
- VSNL takes over Tyco Global Network for $150 mn (Rs 690 crore)
- Tata Chemical acquires Moroccan company Indo-Maroc Phosphore for Rs 166 crore
- Tata Motors picks 21% stake in Spain's Hispano Carrocera for Rs 70 crore
- Tata Tea buys Tetley, UK in February 2000 for Rs 1,870 crore
- Tata Motors takes over Daewoo Commercial Vehicle Company of Korea in March 2004 for Rs 459 crore.
Acquisitions
INDIA ON SONG, TAKES CORUS ALONG
Tatas Outgun Brazilians, Take World By Storm
Mumbai: India’s high noon came when it was midnight in London. In the duel between the Tatas and Brazil’s CSN for Anglo-Dutch steelmaker Corus, the Indians held their nerve as the auction went into the ninth and final round. CSN bid 603 pence to a share; the Tatas, who had made an offer of 590p in the eighth round, upped it by 18p to 608p. The Brazilians blinked.
For $12 billion, Rs 54,000 crore if you will, Tata Steel created history when it finally secured the scalp it wanted so badly — that of Anglo-Dutch steelmaker Corus, forged out of what was once the mighty British Steel — to carve out for itself a chunk of the global steel industry.
This acquisition makes the 100-year-old Tata Steel the fifth largest steel producer in the world, with an annual output of around 25 million tonnes and 87,000 employees on its rolls — a dramatic departure from only a day ago when it was ranked 56th.
The acquisition also marks the emergence of India Inc as a potent force in the global business. It was only last year that Mittal Steel headed by Lakshmi Mittal forged a blockbuster $32.4 billion deal to create Arcelor Mittal, the world’s largest steel company. ‘‘I believe this will be the first step in ensuring that Indian industry can step outside the shores of India in an international market and acquit itself as a global player,’’ said Ratan Tata, chairman, Tata Group.
While Corus Steel’s fate was eventually decided during the course of a single night, the process to find a buyer for the beleaguered European company had started in October 2005, when its bankers, Credit Suisse, set up Project England, the code name for a potential sale.
At that time, Corus was trading on the London Stock Exchange (LSE) at 300 pence a share. ‘‘We didn’t go to them, they came to us, much before Mittal started talking to Arcelor,’’ said Ratan Tata, one of the earlier suitors wooed by Corus.
EMPIRE STRIKES BACK
A hundred years ago, the chief of British railways had poked fun at Jamsetji’s steel dreams...
A Big Deal: Winners, Losers
Rs 54,000 Crore
Tatas to pay $12 bn (Rs 54,000 crore) to acquire Corus at 608 pence (Rs 526 ) per share, which is about 34% higher than its original offer of 455p (Rs 389) made on October 20. It’s also 70% higher than Corus’s average share price over the year prior to the original Tata offer. Tata Steel’s share price, at the end of trading on Jan 31 (Wed) is about 9% down from when it made the first offer while Corus’ is up 27% Tata Steel shareholders have lost, at least in the short-term, while Corus shareholders have gained big-time with shares at seven-year high
Where will the money come from
Of the $12bn, $4.1 bn will be pumped in as cash through the equity route by Tata Steel. The rest will be in the form of debt raised from three banks, ABN Amro, Credit Suisse & Deutsche Bank. The equity will be bridge financed
Market is not happy
The Times of India
CLSA, one of the largest foreign brokerage houses in India, has put a ‘sell’ advice on Tata Steel, saying it had paid too much for Corus. Tata Steel stock closed almost 11% lower at Rs 464 from Tues closing
SPEEDBREAKERS
The British Steel Workers Union has vowed to oppose the deal tooth and nail
The Benefits
Triples Tata Steel’s capacity to almost 28m tonnes from 8.7 million in an industry where consolidation appears inevitable in order to leverage scales Gives it access to high-value Euroopean market; also it can ride on the back of a renowned brand Acquisition cost’s about $710 per tonne whereas greenfield would have cost $1200 per tonne, say Tatas
The Dangers
Tatas have paid a heavy price. The final offer is nine times Corus’ earnings before interest, tax, depreciation and amortisation (EBIDTA), while Mittal paid less than five times Arcelor’s earnings
It now needs to service a very large debt burden
Integration can be a problem in such acquisitions, because of both distance and culture
It’s by far the biggest takeover in the history of India Inc
2nd biggest acquisition in global steel, behind Mittal’s Steel’s $38.3bn takeover of Arcelor last year
Lifts Tata Steel from 56th to 5th in global steel sweepstakes with combined revenue of $24.4bn. Two of the top 5 are now in Indian hands; Lakshmi Mittal’s Mittal-Arcelor is No. 1
Tatas overtake the Mukesh Ambani-Reliance Group to become India’s largest business house. Revenues vault from Rs 70,509 cr last year to Rs 148,885 cr, compared to Reliance’s Rs 88,965 cr.
Combined m-cap, at Rs 299,075 cr, is higher than Reliance’s
Rs 228,677 cr
When we first talked about acquiring Corus, many thought it was an audacious move for an Indian company to make a bid for a European steel company much larger than itself. That was something which had not happened before...This will be the first step in ensuring that Indian industry can step outside the shores of India in an international market and acquit itself as a global player
Research and development
2015 plans
The Times of India, May 14 2015
Reeba Zachariah
Tatas bet on innovation with $2.6bn R&D spend
In what could be the highest research and development (R&D) expenditure by an Indian conglomerate, the salt-to-software Tata Group spends Rs 16,000 crore, or $2.6 billion, on innovations as the Cyrus Mistry-led enterprise bets big on new technologies to boost growth.
The diversified Indian multinational spends 2.5% of its revenue on R&D, which is much higher than the government's R&D spend of 0.9% of the country's gross domestic product (GDP).
A significant amount of the total R&D expenditure by the $103-billion conglomerate goes into automotive, software, materials and metallurgy, with Tata Motors being the most lavish spender within the group. The other major spenders within the group are Tata Steel, Tata Consultancy Services (TCS) and Tata Global Beverages.
The group's research bill has gone up by 28% from Rs 12,500 crore three years ago.
While Nano remains its flag-bearer of innovation, the group's other path-breaking products include Titan Edge, the thinnest watch, and Tata Swach, the world's low-cost water purifier. The conglomerate, under the Tata Innovista programme, has been con ducting research in several areas like products, services, processes, digitization and design, expecting them to deliver billions of dollars in revenue.
Launched in 2006, the Tata Innovista programme promotes innovation across Tata companies worldwide. Over the past decade, it has seen a 15-fold increase in innovation across 70 companies. The top innovation projects this year are expected to deliver an estimated benefit of $1.1 billion annually , the Tata Group said.
Shapoorji Pallonji Group vs. the Tatas
The Tata- Mistry relationship, 1936-2016
From: Reeba Zachariah, September 23, 2020: The Times of India
The SP Group first became shareholders of Tata Sons in 1965 by acquiring 40 ordinary shares and 48 preference shares of its paid-up share capital. “Thereafter, over the years, Cyrus Investments and Sterling Investment acquired Tata Sons’ shares (largely through bonus and rights issue of shares), which have allowed them to reap great economic reward
Cyrus Investments and Sterling Investment have acquired majority of their shareholding through bonus issue and rights issues. While Cyrus and Sterling invested merely Rs 69 crore, they have received dividends of around Rs 872 crore from Tata Sons from 1991 to 2016.”
From: Dhananjay Mahapatra, September 23, 2020: The Times of India
From: Dhananjay Mahapatra, September 23, 2020: The Times of India
See graphics:
How Mistrys came on board Tata Sons
The Shapoorji Pallonji Group’s shares in Tata Sons , as in 2020
The SP Group first became shareholders of Tata Sons in 1965 by acquiring 40 ordinary shares and 48 preference shares of its paid-up share capital. “Thereafter, over the years, Cyrus Investments and Sterling Investment acquired Tata Sons’ shares (largely through bonus and rights issue of shares), which have allowed them to reap great economic reward
Cyrus Investments and Sterling Investment have acquired majority of their shareholding through bonus issue and rights issues. While Cyrus and Sterling invested merely Rs 69 crore, they have received dividends of around Rs 872 crore from Tata Sons from 1991 to 2016.”
The Tatas vs the Shapoorji Pallonji Group, 2016-Sept 20.
The Tata-Mistry relationship is perhaps best described Facebook style: It's complicated. Cyrus Mistry's family and the Tatas have at times been friends, and at other times frenemies since the time Cyrus's grandfather Shapoorji Mistry acquired a sizable stake in Tata Group's main holding company , Tata Sons in 1936.
A Tata observer said that the Mistry family's holding in Tata Sons and their presence on the board has often been a matter of discomfort for the Tatas. “Cyrus's removal as company chairman could be a master stroke that may put pressure on the Mistrys to check them out from Tata Sons,“ the observer said. But that may be a trifle optimistic.Tata Sons is currently one of India's richest privately held companies. Mistrys' 18.5% stake in Tata Sons is worth billions of dollars, and Tatas may find it an uphill task to buy them out, just as they have found it in the past. Tata Sons is the holding company of hundreds of unlisted and nearly 30 listed companies. The listed companies alone are valued at about Rs 8.3 lakh crore (about $125 billion). Going by the value of only the listed companies within the Tata fold, the 18.5% stake held by the Mistry family would be worth about $23 billion.
Shapoorji had acquired Tata Sons shares from the heirs of eminent financier FE Dinshaw in 1936, seven years after Cyrus' father was born.Dinshaw had lent nearly Rs 1 crore to Tata Sons to finance its power unit in 1926 but the latter couldn't repay the amount and, subsequently, the loan got converted into 12.5% stake of Tata Sons. Later, Shapoorji bought some more shares from JRD Tata's siblings, thus increasing his stake to 18.5%.
The story goes that JRD Tata's siblings in a fit of anger had sold their shares to the builder, who has made some famous Bombay landmarks like the Brabourne Stadium and SBI headquarters. Not much is known about why Nowroji Saklatvala, who was chairman of Tata Sons between 1932 and 1938, did nothing to prevent the stake sale. JRD Tata, who succeeded Saklatvala, is reportedly said to have been upset with the entry of a non-Tata family (Shapoorji) into Tata Sons.Mistrys' large shareholding gave them one seat on the board of Tata Sons.
After Shapoorji's death in 1975, Pallonji (Cyrus' father) took his position at Tata Sons.While Shapoorji was believed to have had a tumultuous relationship with the Tatas, Pallonji had a much friendlier relationship with the family . Also, he never interfered with the functioning of Tata Sons. A year after Pallonji stepped down in 2005, Cyrus, his youngest son, took his position at Tata Sons. And in November 2011, Cyrus was named chairman of Tata Sons, the first non-Tata to head the company.
On October 24 afternoon, the 80-year-old relationship between the Tatas and the Mistrys turned bitter again.
Mistry vs. Tata Sons: NCLT rejects Mistry's petition/ 2018
Swati Deshpande, July 9, 2018: The Times of India
The Mumbai bench of National Company Law Tribunal (NCLT) rejected a petition filed against Tata Sons by minority shareholders who had alleged that Cyrus Mistry’s sudden ouster in 2016 as chairperson of Tata Group holding company was oppressive.
Mistry was removed as executive chairman, Tata Sons, on October 24, 2016 by its board. It led to two of his family-run investment firms dragging the corporate monolith and 22 others including Tata Sons chairman emeritus Ratan Tata, various other Tata trustees and directors that December to the company law tribunal to complain of oppression and mismanagement.
The NCLT held that Mistry as Chairman was removed because board of directors lost faith. “The Board is competent to remove Mistry. No selection committee was needed,” said judicial member B S V Prakash Kumar as he read out from the verdict.
The pronouncement has come as sweet victory for Tata Sons whose counsel Abhishek Singhvi had argued extensively that the whole petition was a “proxy battle” by Mistry who he had likened to a “Trojan horse” while arguing earlier.
The bench held, “Removal of Mistry as director is because of acrimonious behaviour and is justified.” It also said, “Proportional representation not possible as articles do not mandate it.”
“No merit in legacy issues - do not fall within section 241 of the Companies Act—which provides for minority shareholders to move for relief agaisnt acts of oppression," the bench added.
“Ratan Tata and Soonawala’s suggestions cannot trigger plea for relief under sections 241-242. No merit in shadow directors argument,” said NCLT.
The tribunal found “No merit that articles including article 75 are oppressive against petitioner,” and said. “Just and equitable ground is added to mismanagement and hence petition is dismissed.”
Tatas welcomed the NCLT verdict. " The NCLT order vindicates the position of Tata Trusts and Tata Sons, said a statement issued by the company.
“The judgement has only re-affirmed and vindicated that Tata Sons and its operating companies have always acted in a fair manner and in the best interest of its stakeholders. The Tata Group has always been committed and will continue to be committed to transparency and good corporate governance of global standards,” said Mr N Chandrasekaran, Chairman Tata Sons.
“Tata Sons hopes that a finality will be given to the judgement of NCLT, Mumbai by all concerned in the larger interest of companies, the shareholders and the public,” Mr Chandrasekaran added.
Reacting to the verdict against it, the office of Cyrus Mistry in statement to the media said, "The ruling is disappointing, although not surprising. We will continue to strive for ensuring good governance and protection of interests of minority shareholders and all stakeholders in Tata Sons from the wilful brute rule of the majority."
"The ruling is in line with the earlier position expressed by the Tribunal. An appeal on merits will be pursued. Matters like TTSL, Air Asia, recovery of dues from Siva, non-closure of a loss-making Nano, a struggling resolution of Tata Steel Europe, all present serious issues that will be pursued. Not only the facts that were under consideration but also subsequent facts and developments that continue to evidence oppression and mismanagement will be under scrutiny and will be pursued in full earnest."
Mistry's office added, "Ours has always been a principled fight to restore the Tata Group to its glorious days of high standards, best practices and most importantly, the best value systems. In this journey, no matter how hard it may seem, as shareholders who have always supported the Tata Group, it remains our duty to protect the Tata Group from those were destroying value and making the Group vulnerable to external forces."
The main grouse is that Mistry’s ouster itself is an act of oppression by Tata Sons, the group holding company, “to prevent him from carrying out a clean-up op against mismanagement.’’ Tata Trusts owns 66 per cent shareholding in Tata Sons. The challenge also centres around five articles of association, including veto rights of majority of Trust nominated directors, which Mistry family feel are oppressive to both, public and their interest as minority shareholders.
The petition before NCLT is filed by Cyrus Investments and Sterling Investment Corporation. But Tata Sons’ counsel Abhishek Singhvi called it a “scurillous’’ attack and “Mistry’s proxy litigation.’’
The Mistry family firms owns 18.6 per cent in Tata Sons, making it the second largest shareholder. But voting rights is for holding less than 4 percent.
Mistry took over the reins to a $103 billion conglomerate from Ratan Tata, when he turned 70 years old, in December 2012. Five months after his removal as chairman, Tata Sons removed him as its director too.
The investments of the Mistry firms had appreciated from the initial Rs 70 crore when they first became shareholders in 1965, to Rs 58000 crore in March 2016, said Tata Sons. In over 50 years, they had never once complained of any mismanagement or oppression, much less of any interdiction by Ratan Tata or N A Soonawala, as they did now, argued Tata Sons.
The ultimate relief provided under the Companies Act for the challenge now raised is winding up of the company—among India’s largest. The NCLT while earlier denying Mistry relief, had hailed the Tata Group as a “salt to software’’ giant, an “untiring provider’’ and a “household name’’ with a global footprint.
After a chequered battle with the matter being sent back to the Mumbai tribunal by its appellate body in Delhi, it was heard since last November by the main bench of BSV Prakash Kumar and V Nallasenapathy, on merits. The bench had concluded a lengthy, animated, seemingly bitter sometimes stormy hearing early February.
Mistry camp’s legal team of counsel C A Sundaram and Janak Dwarkadas had launched an all-out legal battle and made long submissions to bring home their five point allegations that the actions of Tata Sons run by majority shareholders, its chairman emeritus Ratan Tata, various other Trustees right from ousting Mistry was oppressive to minority shareholders’ interest, replete with mismanagement and contrary to provisions of the company law. There was no cause on merits to remove Mistry whose performance was rated high by the company itself, argued his lawyers.
Tata Sons’ Counsel Abhishek Singhvi had hit back at length too to refute their entire case as nothing but an “act of vendetta’’ lacking in any merits by “a Trojan horse’’ relying only on a “ruse’’ to publicly air his displeasure at the loss of his office.’’
Tata Sons had Nitesh Jain of Shardul Amarchand Mangaldas, and host of other senior counsel including Ravi Kadam, Mohan Parasaran, Sudipto Sarkar Mistry for various trustees. Their collective plea was that “Business decisions taken over a decade ago, some even two decades ago, also those which have Mistry’s “express consent” are being raised as “so-called issues and concerns’’ by two of his family owned companies making it apparent that “it is yet another attempt to besmirch the reputation of Tata Group,’’ with “no credible material to establish any oppression or mismanagement.’’
Singhvi said the attack on “lack of corporate governance was a bogey.’’ He hailed Ratan Tata as a revered corporate legend and said Tatas are held up as examples on corporate governance for rest of India Inc.
It was also argued by Tata group lawyers that a board position with Tata Sons is offered by invitation and cannot be sought as of right based on shareholdings.
Tata Sons argued that the law clearly allows removal of a chairperson and director and Mistry was removed by a majority of 7 out of 9, Mistry being one who didn't vote for his removal and one had abstained. Singhvi had delved into legal semantics on use of word “ prejudice” in the new 2013 Companies Act and said that Mistryfailed to prove any.
A key allegation was that the Tata Sons Board had turned into a ‘super board’ was ‘shadow’ directors, and its oppressive articles 121, 121A vested veto powers with majority of the Trust nominated directors which could “prejudice’’ interest of public, minority shareholders and the company itself. The Mistry camp cited as examples of alleged mismanagement, the “Nano project, Corus, discovery and handling of the alleged Air Asia India fraud, NTT Docomo case.’’
Sundaram had argued that the proposed conversion Tata Sons from public to private was a an oppressive move. Much force was put by Sundaram also into how article 75 in the company memorandum of association would be a significant oppressive tool The apprehension was that it would be used now as a tool for oppression as it allows compulsory purchase of shares of any shareholder including Mistry, the two petitioning companies which together hold over 18 percent shares, he said.
Singhvi had said that at all times for over 100 years, irrespective of the changes in Indian law, Tata Sons had always "remained a company exhibiting private characteristics". The change was now only a technicality under the law, was his response.
After Mistry replied to some letters from the Income Tax department after he was removed from office, without any authority to do so, Tatas counsel Singhvi had submitted that the behaviour amounted to that of a Trojan Horse as costing the group dearly.
The NCLT had in 2017dismissed the petitions on maintainability as the Mistry firms lacked the requisite 10 percent equity shares to make them eligible to file, as minority shareholder, an oppression and mismanagement plea under sections 241, 242 and 244, of the Companies act.
The verdict evoked cheers and jeers. Singhvi told TOI, “Having argued this case for over two years, the taste and smell of victory is sweet. We succeeded on every point. It is a precedent setting judgement on many issues.’’ He added, “ People should leave egos and call a closure to a fight well fought, but lost. Tata is too precious a brand name to be incessantly attacked out of personal ego. We have no doubt that if carried to NCLAT we will have another intellectually satisfying experience.’’
NCLT’s order
Swati Deshpande, NCLT finds no merit in purported legacy issues, July 10, 2018: The Times of India
The NCLT held:
The removal of Cyrus Mistry (CPM) as executive chairman of Tata Sons on October 24, 2016 is because the board of directors and the majority shareholders, i.e. Tata Trusts, lost confidence in CPM as chairman and not because by contemplating that CPM would cause discomfort to Ratan Tata, N A Soonawala and other answering respondents for purported legacy issues › Board competent to remove executive chairman. No selection committee was required before removing Mistry as executive chairman › There is no merit in representation on board to petitioners proportionate to the shareholding of the petitioners and this is not possible so long as the Articles of Association does not envisage it › Tribunal has not found any merit in purported legacy issues such as Siva, TTSL, Nano car, Corus, Mehli Mistry, AirAsia issue, or that they are acts of oppression and mismanagement › Tribunal has also not found merit that the application under section 14 of CA 2013 for conversion to private co is an act of oppression › There is no merit in argument that Tata and Soonawala’s notices and suggestions amounted to interference in administering the affairs of the co and was prejudicial to the interests of the co › There is no merit in the argument that Tata and Soonawala acted as ‘shadow directors’ and no action under Companies Act as sought is required in this regard › Tribunal does not find merit that Articles of Association 75, 104B, 118, 121 are oppressive against the minority shareholders › There is no merit in the argument that majority rule has taken back-seat by introduction of corporate governance in the Companies Act. If corporate democracy is the genus, corporate governance is a specie. They are never in conflict with each other. The management is more accountable to the shareholders under the present regime › It is observed that remedy for prejudice caused is included under the Act in addition to remedy for oppressive acts. It is further observed that just and equitable ground is included as a pre-condition in mismanagement issues, which was not the case under the old Act.
The National Company Law Tribunal (NCLT) — in its written order in the Cyrus Mistry versus Tata Sons case, which was released has observed that “whoever invested more shall have his say over the affairs of the company”. The tribunal said, “It is obvious that minority sailing along with majority is bound by the rule of majority. Otherwise, it will become curtailment of the rights of majority shareholders.”
The NCLT said that since Ratan Tata heads Tata Trusts, which owns two-thirds of Tata Sons, the conglomerate has to be run “at the wish of the majority shareholders”.
Mistry’s family firms, which together hold a little over 18% in Tata Sons, had complained about the abuse of the company’s articles of association by Ratan Tata and his business dealings with close friends, C Sivasankaran and Mehli Mistry. The companies also raised concerns about the expensive Corus acquisition, the bleeding Nano car project and aviation “misadventures”, which had caused huge losses to the Tata Group. Mistry’s family firms made the complaint after he was abruptly removed as the chairman of Tata Sons in October, 2016.
The NCLT, in its 368-page order, said that “Mistry assumed in his mind that he was given a free hand to run the affairs of the company”, an idea which is “incongruous to corporate governance and corporate democracy”. The NCLT said, “In corporate democracy, decision making always remain with the board of directors as long as they enjoy the pleasure of the shareholders. Likewise, even executive chairman will also continue as long as he enjoys the pleasure of the board.”
The NCLT said that although Mistry was appointed as the chairman to preside over the board, he “could not become a sovereign authority over the company because the superior body in any company at first level are the shareholders, thereafter, the board, elected by those shareholders”.
‘Seeking info on co’s affair doesn’t amount to meddling’
Petitioners Have Tried To Steamroll Biz Decisions Upon Tata To Bully Him: NCLT
The tribunal, which made scathing observations, said that because of the “heartburn” for Mistry being removed from the chairman’s post, the petitioners have tried to “steamroll all the business decisions upon Ratan Tata” as “mismanagement” in a bid to “bully” him.
The NCLT noted that all business judgments need not “click” and “pump money into the company”, suggesting that Ratan Tata doesn’t have a “magic wand”. “If Mistry felt his removal as chairman is in violation of any Articles of Association or provisions of the Companies Act, the only recourse available to him is to proceed against Tata Sons before the court of civil law,” the NCLT said.
The tribunal also remarked that the petitioners have “disgustingly” tried to tag Ratan Tata and other trustees of Tata Trusts as “shadow directors”. Mistry’s family firms complained that Ratan Tata and other trustees interfered with the administration of the affairs of the Tata Group.
The NCLT, however, observed that Ratan Tata’s advice in relation to the conglomerate’s affairs cannot be construed as conducting its affairs. “Unless such advice is put into action, it cannot be called as conducting the affairs of the company.”
The NCLT also pointed out that Ratan Tata and other trustees seeking information doesn’t amount to conducting the affairs of the company. When a majority shareholder himself is not a director and he nominates someone, it is obvious that the majority shareholder must have prior information to take informed decision to advise his nominee director to take a right call on a said point, the order said.
The tribunal also said that Ratan Tata’s close relationship with Sivasankaran and Mehli Mistry and the deals between them cannot be concluded that the transactions are not at arm’s length and not for the benefit of the Tata Group. The NCLT said that a conclusion can be only arrived at if there has been an existence of fraud, unlawful gain or compromise in standard practices in these transactions.
‘Tatas can’t force Mistry to sell stake’
‘Tatas can’t force Mistry to sell stake’
The National Company Law Appellate Tribunal (NCLAT) on Friday restrained Tata Sons from taking any action that would lead to the dilution of the Cyrus Mistry family’s 18.4% stake in the firm or from forcing them to sell their shares until it decides on their plea alleging minority shareholder oppression and mismanagement by the Tata Group’s holding company.
However, the two-member bench headed by Justice S J Mukhopadhyay didn’t stay Tata Sons’ conversion into a private limited company, stating that it would decide on the issue after hearing the final arguments. The appellate tribunal will hear the arguments on September 24.
It admitted Mistrys’ appeal against the National Company Law Tribunal (NCLT) order that dismissed their case, stating that it didn’t find any merit in the allegations of minority shareholder oppression, mismanagement and corporate governance lapses at the Tata Group. The NCLAT observed that since the Registrar of Companies has certified Tata Sons as a private company, the conglomerate may order minority shareholders to transfer their shares. Article 75 of Tata Sons’ Articles of Association empowers the company to force a shareholder to sell out.
The NCLAT order said, “If (Mistrys) are forced to sell their shares, which may affect the merits of the appeal as they will cease to be members of the company, we direct (Tata Sons) not to take any step in terms of article 75 during the pendency of the appeal.” Representing the Mistrys, senior counsel C A Sundaram argued that soon after their appeal against the NCLT order was filed before the NCLAT on August 6, Tata Sons “hurriedly moved” the Registrar of Companies, which passed a certificate converting the holding company as Tata Sons Private Limited.
Tatas said that they had never used their powers under article 75 since the inception of Tata Sons over a century ago. Tata Sons was incorporated as a private company in November 1917 and continued to remain so till the Companies Act came into play in 1956. Tatas counsel Abhishek Manu Singhvi submitted that changes in law in 1960 and 1975, setting out certain parameters like turnover, allowed Tata Sons to become a deemed public limited company.
RoC, 2018: Mistry ouster: Tatas violated rules
Mistry ouster: Tatas violated rules, says RoC, November 1, 2018: The Times of India
The sacking of Cyrus Mistry as chairman and director of Tata Sons and TCS violated provisions of Companies Act, RBI rules and more importantly, Tatas’ own Articles of Association, the RoCMumbai said in an RTI reply, a charge that the Tatas have vehemently denied.
“The respective board of directors acted as per the provision of the Companies Act as well as in compliance of the articles of association of the company. This was subsequently approved by both the shareholders of Tata Sons and TCS. The NCLT has also confirmed that the process followed for removal of Mistry was valid and accordance with law,” a Tata Sons spokesman said.
But TCS did not send out the complete representation of Mistry to all shareholders, which violates section 169 (4)(b) of the Companies Act, noted the RoC reply to an RTI filed by the Shapoorji Pallonji Mistry Group. RoC-Mumbai also found that Tata Sons violated rule 118 of its articles of its AoA, when it removed Mistry.
It goes on to add that Tata Sons “being an NBFC duly registered with RBI, any management change requires prior approval of the RBI”, which was also not complied with.
SC judgement of 2021
Dhananjay Mahapatra, March 27, 2021: The Times of India
From: Reeba Zachariah, March 27, 2021: The Times of India
The Supreme Court upheld Cyrus P Mistry’s removal from the post of executive chairman of Tata Sons and rejected the Shapoorji Pallonji Group’s accusations against Ratan Tata, including Tata Sons board’s allegedly oppressive practices against minority shareholders.
The court dismissed SP Group’s last-minute plea for evaluation of its shares for an honourable exit from Tata Sons through payment of fair compensation. The bench said, “At this stage, and in this court, we cannot adjudicate on fair compensation. We will leave it to the parties to take the Article 75 route or any other legally available route.”
SC: Incomprehensible NCLAT directed Mistry’s reinstatement
A bench of Chief Justice S A Bobde and Justices A S Bopanna and V Ramasubramanian in a 282-page judgment shredded SP Group and Mistry’s arguments against Tata Sons and wondered how the National Company Law Appellate Tribunal (NCLAT) could have deviated from the law to order Mistry’s reinstatement even after expiry of his tenure as executive chairman and direct conversion of Tata Sons into a public company.
The court said, “In fact, it may be conceded today by Tata Sons that one important decision that the board took on March 16, 2012 (appointment of Mistry as executive deputy chairman) certainly turned out to be the wrong decision of a lifetime.”
Writing the judgment for the bench, CJI Bobde laid the blame squarely at the doors of Mistry and SP Group for starting the fight with Tata Group and Ratan Tata. “It is an irony that the very same person who represents shareholders owning just 18.37% of the total paid-up share capital and yet identified as the successor to the empire, has chosen to accuse the very same board of conduct oppressive and unfairly prejudicial to the interests of the minorities,” the bench said. The SC blamed Mistry for bringing misfortune on himself by attempting to set the house on fire, the safekeeping of which was entrusted to him. “In any event, the removal of a person from the post of executive chairman cannot be termed as oppressive or prejudicial,” the SC said.
“Mistry himself sought, while accepting the office, the continued guidance of Ratan Tata. When the board, of which Mistry was chairman, nominated Ratan Tata as chairman emeritus and recorded their desire to look forward to his support and guidance, it was not open to the SP Group to call Ratan Tata a shadow director. If someone, aggrieved after his removal from office can engage in shadow boxing through the companies controlled by him, he cannot accuse the very same person who chose him as successor to be a shadow director. Someone who gained entry through the very same door, cannot condemn it when asked to exit,” the CJI said. Dismissing the claim of SP Group companies that Tata Sons’ affairs were conducted in a manner oppressive towards minority shareholders like SP Group, the SC said, “If the company’s affairs have been or are being conducted in a manner oppressive or prejudicial to the interests of the SP Group, we wonder how a representative of the SP Group, holding a little over 18% of the share capital, could have moved up to the topmost position within a period of six years of his induction.”
Referring to Mistry’s conduct in causing a sensation by leaking to media his confidential email accusing Tata Sons directors of not discharging their duties and calling Tata Trust’s nominee directors “postmen” and his writing to tax authorities about Tata Sons’ accounts, the bench said such conduct surely warranted his removal.
“A person who tries to set his own house on fire for not getting what he perceives as legitimately due to him does not deserve to continue as part of any decision-making body (not just the board of a company). It is perhaps this realisation that made the complainant companies (SP Group) give up their original prayer for restraining the company from removing Mistry and singing a different tune seeking proportionate representation on the board,” the SC said.
The SC slammed the NCLAT for ordering Mistry’s reinstatement even when it was not sought by the SP Group. “It is incomprehensible that the NCLAT directed reinstatement, and that too of a director of a company, after the expiry of his term of office. Needless to say that such a remedy would not have been granted even by a labour court/service tribunal in matters coming within their jurisdiction,” the CJI said.
Referring to Mistry’s team’s allegation about failed business ventures like the Tata Nano car project and telecom venture Docomo, the SC said, “Failed business decisions and the removal of a person from directorship can never be projected as acts oppressive or prejudicial to the interests of the minorities, it is too well settled.”
The SC also rejected SP Group’s claim for proportionate representation on the Tata Sons board. “The right to claim proportionate representation is not available even to a minority shareholder statutorily, both under the 1956 Act and under the 2013 (Companies) Act. It is available only to a small shareholder, which SP Group is certainly not. The right to claim proportionate representation is not available to the SP Group even contractually, in terms of the articles of association. Neither SP Group nor Mistry can request the tribunal to rewrite the contract, by seeking an amendment of the articles of association,” the SC said.
TATA Motors
2017: Prolonged strike
HIGHLIGHTS
About 6,000 workers of Tata Motors' Jamshedpur plant have gone on strike since September 6
The strike ensued with a discrepancy in payment which has since been resolved
The workers have now raised their long standing demand of permanency
Auto major Tata Motors' Jamshedpur plant is witnessing a strike by a section of workers for the last three days after the employees complained of discrepancy in payments among other issues.
The strike started on Wednesday (September 6) after the workers noticed irregularities in the pay slips issued to them on September 5, for the month of August after which 'BY6' ( non-permanent) employees went on a strike. Sources suggest that about 6,000 workers are staging protest. The Jamshedpur plant has a workforce of roughly 10,000 workers.
Timesofindia.com talked to a section of workers who claimed that they were not reimbursed in accordance to the arrears that were due after a wage revision that took place in the last month of July. However, after the workers went on strike, the company took notice and cleared the dues, the sources said.
"The pay slip I received on September 5 suggested that I stand to receive Rs 1,896 for the month of August. Under normal circumstances, my in-hand salary is Rs 15,000 which I thought would increase after the wage revision," said one of the employees, on conditions of anonymity.
"Once we started protesting, the officials got alarmed and made the payments," the worker added.
The company however has blamed a 'technical glitch' for the error. An official statement issued by the Tata Motors reads, "The problem arose where there was an error in their payment slip owing to a technical glitch (thus reflecting an amount less than what they were entitled). This was later on resolved and the payment was also made."
The workers meanwhile have chanced upon this occasion to leverage their long-standing demand for permanent employment.
"We demand permanency of 500 employees immediately and a yearly quota of 700 employees. If the management does not agree upon our demands we will go on a hunger strike from tomorrow," an employee participating in the strike said.
Tata Motors said that its management is working towards reaching a resolution. "This section of workers have continued to protest now demanding permanency and other perks that are being offered to permanent workers. The management has been in constant dialogue with them and is trying to resolve the same at the earliest," Tata Motors said in statement.
There are conflicting claims with regards to production as well. While the workers claim that the daily production has come down to 30-40 trucks from the usual number of 80, the management is of the opinion that production has been going on as per schedule and the management has taken remedial action to ensure that it is close to the requirements.
The Tata Motors shares have also taken a beating on the back of the ruckus. At 1.30 pm, the stock was down 1.30 per cent at Rs 208.90 in comparison to the broader market which was trading flat.
Tata Sons
2018>19: Staff costs up 67%
Reeba Zachariah, August 21, 2019: The Times of India
From: Reeba Zachariah, August 21, 2019: The Times of India
Employee costs at Tata Sons, one of the bones of contention within the management leading to the removal of Cyrus Mistry from the chairman’s post, has shot up 67% in fiscal 2019. Staff costs form a significant chunk of total expenses, which have risen 45% to Rs 3,985 crore at a time when profits from operations are showing slow growth.
Between fiscals 2013 and 2016, while Mistry was at the helm, staff costs rose steadily from Rs 84 crore to Rs 180 crore. After his exit, figures for subsequent years — fiscals 2018 and 2019 — indicate a further steep rise to Rs 239 crore and Rs 399 crore respectively.
The annual compensation of N Chandrasekaran, who took over as chairman in February 2017 after Mistry’s exit, rose 20% to Rs 66 crore in fiscal nathan, CEO of TCS, the most profitable company within the Tata group.
Chandrasekaran’s Rs 66-crore compensation includes commission of Rs 54 crore. In fiscal 2018, the chairman earned Rs 55 crore. Mistry earned 2019, according to Tata Sons’ latest annual report. The second highest paid executive was Saurabh Agrawal, chief financial officer, whose compensation was Rs 16 crore. Agrawal’s compensation was same as that of Rajesh Gopifar less, about Rs 16 crore per year, during his chairmanship at Tata Sons.
The bulk (Rs 385 crore) of total employee benefit expenses for 2019 at Tata Sons, which primarily earns its income from dividends and brand royalty fees, consisted of salaries and bonuses.
Since Chandrasekaran, former TCS CEO, took charge at Tata Sons, he has expanded the team by making lateral hires (Agrawal, chief economist Roopa Purushothaman, head of infrastructure Banmali Agrawala, legal head Shuva Mandal and others) and hiring from TCS (Suprakash Mukhopadhyay, Aarthi Subramanian and Nupur Mallick). This has reportedly not gone down well with the old guard. Agrawal is assisted by a team of 10-15 people comprising mainly of former investment bankers, while Purushothaman has a team of 10 people.
Tata Trusts
Philanthropic activities, 2005-16
Aid from Tata Trusts up 10-fold in 10 yrs, Oct 29 2016 : The Times of India
Tata Trusts, which hold the controlling stake in Tata Sons and earn dividends from investments in group companies, spent Rs 750 crore ($125 million) in 2015-16 on philanthropic activities. It makes the Trusts the leading foundations in the country .
Tracing their history back to 1892 when the first Trust was established by group founder Jamsetji Tata, they are a cluster of eight charities which disburse money for welfare measures in diverse areas, including education, healthcare, energy and technology .
Expenditure has grown steadily over the years. The Tata Trusts, including the flagship the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, had, in all, disbursed Rs 260 crore (nearly $52 million) in 2008-09, a jump of 242% from Rs 76 crore in 2005-06.
The Trusts had recently expressed concerns about being “more and more dependent“ on a couple of group firms in the Tata stable to generate income for their activities, but that has not been allowed to come in the way of their work. In the last decade alone, financial aid to various sectors has increased 10 times from Rs 76 crore to Rs 750 crore. For comparison, Ford Foundation, the oldest foreign foundation in India, gave grants worth $133 million (Rs 891 crore, by current ex change rate) in the region covering India, Nepal and Sri Lanka over an eight-year period from 2006 to 2014.
The Tata charities, which helped build many of Mumbai's best-known institutions, have scaled up their activities and spread to different parts of the country. Ratan Tata, who heads the trusts, said in the 2014-15 annual report, “In recent years, Tata Trusts have also adopted an approach that focuses on national issues that impact the lives of many.“ Programmes supported by the Trusts now reach out in 17 states through a network of over 450 partner organisations and at least 25% of the corpus is spent on healthcare.
When the initiative started, Jamsetji began with the J N Tata Endowment Scheme for Higher Education to send abroad future administrators, scientists, doctors, lawyers and engineers, according to author R M Lala (The Heartbeat of a Trust), the erstwhile chronicler of the group.
Jamsetji died seven years before the Indian Institute of Science, funded by his charities, opened at Bangalore. Later, the Dorab Tata Trust (named after the founder's son and his successor as group chairman) would fund Tata Memorial Hospital, Tata Institute of Fundamental Research, Tata Institute of Social Sciences and National Centre for Performing Arts.
2006-2015: Expansion, contraction
The Times of India, Mar 31 2016
Reeba Zachariah & Namrata Singh
10 yrs on, economics trumps Tata Group's global ambition
Former Tata Group chairman Ratan Tata catapulted the Indian conglomerate onto the global big league with iconic acquisitions in Tetley tea, Pierre Hotel in New York, Jaguar Land Rover and Corus Steel.His successor Cyrus Mistry , on the other hand, appears to be more keen on stemming losses by knocking off under-performing assets. While the approach of the two leaders seems to be different, in reality it is largely driven by the prevailing economic environment.
Back in 2006, the group's ambitions were soaring and it wanted to capture the global share of the steel market.Finances were not a constraint and it was facing challenges in expanding in the domestic market. In a bid to de-risk the business, Ratan Tata set his sights on overseas assets. It was a logical game plan then and, to meet this dream, Tata Steel got into a huge bidding war with Brazil's CSN for Corus. Outbidding CSN to win this crown jewel of Britain certainly put India and the Tata Group on the global map.
Cut to the present: The environment for Mistry is different. Falling steel prices, rising operational costs, softening demand for steel and Chinese competition has deteriorated Tata Steel's UK operations, forcing the 47-year-old Mistry to consider a sale of the business. His strategy is backed by management experts who believe the CEO should frame his strategy and capabilities in accordance with the growth phase of an organization.
Tata Steel's books are laden with $11-billion debt. On Wednesday , the company sa d it will explore all options or portfolio restructuring, ncluding the potential divestment of the UK business n whole or in parts. The UK business is losing around 1 million pounds a day .
When Tata Steel acquired Corus (now Tata Steel Europe), it was critiqued for being an “expensive deal“ that the Tatas entered into when market valuations were at their peak. Ratan Tata then defended the deal and told German weekly Der Spiegel “those who accuse us of having paid oo much are making a very short-sighted judgement“.He had his own reasons to believe so. Back then, Tata Steel wanted to expand its capacity and global presence and it saw Corus doing both of these in one shot. But hings did not materialize as per the company's plans.The 2008 financial crisis resulted in a decline in demand for steel and prices dipped.This led to production cuts, restructuring and sale of assets in a bid to keep the business afloat.
Commenting on whether Commenting on whether the company had any regret about acquiring Corus, Koushik Chatterjee, CFO, Tata Steel, said, “One has to go back to that time when we were in an environment where the demand conditions and the robustness of the demand positions in developed countries were much more stable than emerging mar kets like India.“ Describing the situation now, he said, “There are factors and structures on which companies have no control. It can happen to any country, to any company and in any sector.“
Tata Steel has written off around $3 billion on its UK operations, which employs about 15,000 people. The Tata Group is currently UK's biggest manufacturer, with almost 40,000 workers, accor ding to The Economist.
Titan Company Limited
1980s/ Selecting the signature tune for television commercials
Vinay Kamath, How Titan picked a classical tune for the brand, December 27, 2018: The Hindu
Extracted with permission from Hachette India
Titan: Inside India’s Most Successful Consumer Brand is a story of innovation, out-of-the-box thinking, and fortitude. It narrates how the Tatas launched the quintessential Indian brand against all odds. Titan’s founding managing director, the late Xerxes Desai, had worked with ad agency Ogilvy & Mather (then OBM) to select the signature tune for the brand’s television commercials, which was a piece of Western classical music. This extract from the book by The Hindu BusinessLine’s Associate Editor recounts how the tune was chosen:
The next move by OBM was in television advertising. Xerxes Desai was a creative person with a keen eye for detail, language and aesthetics. He was a Western classical music and jazz aficionado, and in Suresh Mullick he found the perfect collaborator. Suresh, too, had a keen ear for music, both Western and Indian classical, as all his work revealed. He had made several landmark short films for Doordarshan in the 1980s such as Spread the Light of Freedom featuring the country’s top sportspersons running with a torch, and the famous Mile Sur Mera Tumhara featuring India’s top musicians. He was also the brain behind Cadbury Dairy Milk’s successful relaunch campaign in 1981 with the line “Sometimes Cadbury’s can say it better than words”. Best of all, Xerxes and Suresh shared a great rapport.
A range of choices
In order to derive maximum synergy, it was decided that the television ad would be an adaptation of the catalogue-styleprint ad. It was an easy decision to make the watch the hero and showcase Titan’s entire range. The big question was what soundtrack should accompany the visuals. A commonly used audio track was to offer a product description, but this was ruled as being too boring and likely to detract from the visual. The second most popularly used track was a jingle. But the success rate for jingles was under 5 per cent. Also, jingles needed to be translated owing to the linguistic and cultural differences across regions, and that made it a challenging task. No one had managed to do this effectively.
After much discussion, it was agreed that a catchy piece of instrumental music would work best. Here again there were many choices: Indian pop music or classical music were considered and dropped because they did not have universal appeal. That left Western pop or classical. Eventually, they decided upon a piece of Western classical music with mass appeal. Xerxes and Suresh were well placed to make the right choice, given their knowledge and affinity of Western classical music. Suresh zoomed in on Mozart’s 25th Symphony, and picked the track from the 1984 award-winning movie, Amadeus, on Mozart’s life. Jaideep Samarth had picked up the CD for him while holidaying in London. So confident was Suresh that he had a scratch television ad prepared and presented it to the Titan team as an almost finished product. Xerxes immediately liked what he heard of Mozart and decided this was it. He had made his choice. The campaign was proposed and approved in its entirety in one sitting.
The first television ad showed a series of watches one after another. As the second hand ticked, the watch face changed. The ad conveyed the message that you didn’t have to go abroad to buy a quartz watch any more; you could buy it in India. This television campaign was a seminal achievement that defined Titan for the next 30 years.
A world-class feel
It was unheard of in the mid-1980s to use Western classical music for an Indian brand aimed at an audience little exposed to that genre of music. But it struck a chord. Xerxes felt the music gave the brand a world-class feel. “Of all the symphonies of Mozart, this one has a tremendous amount of enthusiasm and spirit about it,” Xerxes would say. Titan’s signature tune would go on to entrench itself so deeply in the public mind that television audiences knew it was a Titan ad the moment the music came on even if they weren’t watching.
Subsequent ads used many variations including Indian musical instruments to essay the symphony. As Xerxes said with a chuckle, “I don’t know if Mozart will turn in his grave or get up and applaud with the kind of things we’ve done to his symphony using so many other instruments.” Mozart’s 25th Symphony remains Titan’s signature tune to date.
Women in leadership positions
Women CMOs/ 2017
HIGHLIGHTS
Tata group is witnessing a trend of a growing brigade of women chief marketing officers
The steel- to-software conglomerate has nine women CMOs
Over the last two decades, the Tata Group has diversified into a number of businesses that had a direct connect with consumers
MUMBAI: As the $104-billion Tata Group expands its presence in consumer-facing businesses, which by now clearly contrast its traditional manufacturing and hardcore commodity businesses, it is witnessing a trend of a growing brigade of women chief marketing officers (CMOs).
Across companies like Titan, Trent, Indian Hotels Company, Tata Chemicals, Tata Capital, Tata Trusts and Tata Communications, the steel-to-software group — which directly touches 650 million people through its consumer-facing businesses — has nine women CMOs. This is an impressive number when compared to other diversified Indian conglomerates.
Women managers are in demand in marketing departments, given their ability to multitask as also their understanding of core consumers, that is, women. When dealing with women as a consumer, most marketers think it wise to have women leaders frame product strategies. Harish Bhat, brand custodian at Tata Sons, who has been with the group for three decades, has clearly seen this trend play out. Bhat said marketing today requires far more multitasking than it did, say, 10-20 years ago. He expects this trend to strengthen in future.
"I think modern marketing requires three brains. There's the left brain which is to do with data analytics, the science of marketing and media planning. But equally important is the right brain which is to do with creativity, imagination and design. Sometimes, I fear, marketers are getting so swamped by data analytics and all the numbers, that the right brain is getting submerged. And then of course you require a third brain to synthesize inputs from the first two brains, narrate authentic and captivating stories, and engage constantly with consumers across diverse media," Bhat told TOI, in an exclusive interview.
"So clearly, today, senior marketers, including CMOs, have to multitask across these three brains to engage successfully with consumers. Based on experience, I believe women professionals can multitask far more seamlessly. They multitask better at work, because I think they also multitask far better in life," Bhat said.
Over the last two decades, the Tata Group has diversified into a number of businesses that had a direct connect with consumers. Be it tea, jewellery or clothing — the key decision makers are women. As the group changed its culture and introduced women-friendly policies, it began to attract more women managers. This year, of the number of direct recruits who joined the group through the much acclaimed Tata Administrative Services (TAS), 50 per cent were women.
The numbers have been in the range of 45-50 per cent women employees from TAS over the last three years. Prior to that, it was in the range of 30-40%. As its number of women inched up each year (approx 178,000 as of April 2017), the Tata group's pipeline of female leaders, too, started to build.
Describing the rise of women CMOs at the Tata Group as a natural progression, Bhat, however, said gender diversity for marketing is an imperative. "At the top of the marketing profession today, there are many more women who are orchestrating brilliant efforts for their respective companies and brands. Many of our companies in the Tata Group also see a strong pipeline of women marketers growing up through the ranks — both at junior and middle levels," said Bhat.
"Companies of the Tata Group are empowered to hire on their own depending on the kind of capabilities and skill profiles they require. Some women marketers in Tata have grown within the group over several years, and some are lateral hires from outside. We are totally focused on building a leadership pool for the future — the finest marketers of tomorrow."
