The House of Tata Government Challanges (A)

IMB 899
THE HOUSE OF TATA:

GOVERNANCE CHALLENGES (A)
J. RAMACHANDRAN, SAVITHRAN RAMESH, AND K.S. MANIKANDAN
J. Ramachandran, Professor of Strategy, Savithran Ramesh, Research Associate both at the Indian Institute of Management
Bangalore and K.S Manikandan, Associate Professor at the Indian Institute of Management Tiruchirappalli prepared this case for
class discussion. This case has been developed from publicly available information and is not intended to serve as an
endorsement, source of primary data, or to show effective or inefficient handling of decision or business processes.
Copyright © 2021 by the Indian Institute of Management Bangalore and Indian Institute of Management Tiruchirappalli. No part
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This document is authorized for use only in Prof. Joanna Mankad's Business Ethics & Corporate Governance - PG at Foundation for Liberal & Mgmt Education (FLAME) from Jan 2022 to Jul
2022.
The House of Tata: Governance Challenges (A)
December 2019. The National Company Law Appellate Tribunal (NCLAT) reinstated Cyrus Mistry (Mistry) as executive
chairman of Tata Sons Limited (Tata Sons). Earlier in October 2016, Mistry was abruptly removed as chairman by the
board of Tata Sons, the “parent” company of the diversified Tata Group (see Exhibit 1 for the performance of the
top group companies and Exhibit 2 for the shareholding in these group companies) and later removed from the
board through a shareholder vote. Mistry, also a shareholder 1 in Tata Sons, approached the National Company Law
Tribunal (NCLT) against this decision and alleged interference by Tata Trusts2 (majority shareholders of Tata Sons) in
the conduct of the board of Tata Sons leading to mismanagement of the Tata Group and oppression of minority
shareholders. In 2018, NCLT held that the actions taken by Tata Sons and its board of directors, including the removal
of Mistry, were valid since it was within the right of majority shareholders to run the company as they saw fit and
remove an executive chairman for poor performance. i On appeal by Mistry, the NCLATii overturned the earlier verdict
by NCLT, reinstated Mistry as the chairman, declared the appointment of his successor N Chandrasekaran as the
chairman of Tata Sons illegal, and precluded Tata Trusts from deciding in advance the decisions to be taken by the
board of directors of Tata Sons.iii
The contrary interpretations arrived at by the tribunals injected a degree of uncertainty surrounding the
management of the 150-year-old Tata Group.
THE TATA GROUP: EARLY HISTORY
The genesis of the Tata Group could be traced to the trading firm started by Jamsetji Nusserwanji Tata (JNT) in 1868.
JNT soon ventured into manufacturing of textiles and the hotel industry. JNT’s ambition to set up new industries in
the country was sustained by his son, Sir Dorabji Tata (Dorabji) who succeeded him. Under Dorabji, Tata Group set
up India’s first steel plant, cement manufacturing unit, private electricity generation facility, indigenous insurance
company, and a detergent manufacturing unit. Each of these businesses were set up as a separate company. Dorabji,
along with his brother Sir Ratan Tata and his uncle Ratanji Dadabhoy Tata (RD Tata), set up Tata Sons as the family’s
investment arm and the family’s stakes in the various Tata companies were routed through Tata Sons. Dorabji and
Sir Ratan Tata bequeathed most of their inheritance and wealth including the shares in Tata Sons to philanthropic
endeavors, leading to the formation of charitable trusts in their names. In setting up the charitable trusts, the sons
followed the dictum of their father, JNT, who once said:
In a free enterprise, the community is not just another stakeholder in business, but is in fact the very
purpose of its existence.iv
Other Tata family members who held shares in Tata Sons also gave away their shares to charitable trusts set up for
different purposes. The trusts (“Tata Trusts”) together have since then consistently held a large controlling stake in
Tata Sons.
RD Tata’s son, Jehangir Ratan Dadabhoy Tata (JRD), took over as chairman of Tata Sons in 1938. RD Tata’s share in
Tata Sons was left to JRD who shared it equally with his three siblings v (see Exhibit 3 for the family tree). In the
sixties, the Shapoorji Pallonji Group (SP Group) became a shareholder of Tata Sons when it bought the holdings of
JRD’s siblings in Tata Sons.vi JRD was reportedly upset about the sale of shares by his siblings that had led to the SP
Group having a bigger shareholding of Tata Sons than the members of Tata family.vii As per the prevailing laws,
though JRD remained the head of the Tata Trusts, the Tata family had limited control on the voting on the
shareholding of the Tata Trusts as they were determined by government appointed public trustees.viii In 1974, JRD
(with the consent of Pallonji Mistry, Cyrus Mistry’s father and the head of SP Group) amended the articles of
association of Tata Sons such that board approval was required for any transfer of the company’s shares.ix Pallonji
1 Cyrus Mistry and his family members (The SP Group) held their 18.4% shareholding through the firms Cyrus Investments and Sterling
Investments.
2
Tata Trusts held approximately 67% of the shares in Tata Sons.
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Mistry joined the board of Tata Sons in 1980 and is known to have had a good relationship with both JRD and his
successor, Ratan Naval Tata.x
JRD YEARS
JRD’s outlook of business mirrored that of his predecessors. He said:
The Tatas are in fact a trust and an institution more than just a business house...consider major problems
of the country in connection with the firm as trustees and not as businessmen merely trying to make money
for the firm. Incidentally, we want to make money because that is the only way to make funds available to
charitable trusts.xi
JRD grew the business by expanding into many new industries including automobiles, chemicals, information
technology, watches, and tea. During JRD’s tenure (1938-1991), the group grew from 14 to 95 companies resulting
in the Tata Sons’ stake in the various group companies getting progressively diluted.xii JRD also brought in
professionals to run the group companies independently. A group-wide initiative, Tata Administrative Services (TAS),
was launched to recruit and groom talented individuals for management careers in Tata companies. In 1969, when
the Government of India with a view to curb the power of large business groups such as the Tatas introduced the
Monopolies and Restrictive Trade Practices Act, the Tata Group claimed that its affiliates were professionally
managed independent companies and JRD was a just a part-time chairman. Even when the regulatory restrictions
were eased in the 1980s, JRD did not feel the need to institutionalize the group affiliation. JRD explained:
I would call it a group of individually managed companies united by two factors…that they are part of a
larger group, the Tatas. Each company enjoys its share of privilege. Second, there is innate loyalty, a sharing
of certain beliefs.xiii
JRD’s style of leadership, which he once described as ‘leading men with affection’,xiv resulted in CEOs of large Tata
companies such as Darbari Seth (Tata Chemicals and Tata Tea), Ajit Kerkar (Indian Hotels), Russi Mody (Tata Steel)
and Nani Palkhivala (ACC) becoming strong independent leaders in the Group. Kerkar commented:
He was the kind of chairman any professional manager should have. He laid down the policies but never
interfered with the day-to-day working. …he never imposed his own will on anything. That was his
greatness.xv
RATAN TATA YEARS3
Ratan Naval Tata (RNT) was brought up by his grandmother Lady Navajbai Tata, following the separation of his
parents. After his graduation from Cornell University with a double major in engineering and architecture, he
planned to stay on in the United States. However, he had to return to India in 1962 when Lady Navajbai’s health
deteriorated. Upon JRD’s invitation, RNT joined the group and began his career at Tata Steel. Over the next 30 years,
he had stints in various group companies that included unsuccessful efforts at turning around the ailing companies
NELCO and Empress Mills. Recalling his experience at Empress, RNT said:
At around this time, the whole Indian textile industry went through a bad patch. So, some Tata directors,
chiefly Nani Palkhivala, took the line that we should liquidate the mill. I argued with them. We needed just
₹50 lakhs4 (5 million) to turn it around. But Nani opposed giving us the money and we closed the mill
down.xvi
3 This section is partially derived from the earlier case ‘Leading the Tata Group (A): The Ratan Tata Years’ by K S Manikandan, K Rajyalakshmi, and
J Ramachandran (https://hbsp.harvard.edu/product/IMB597-PDF-ENG).
4
₹ = Indian Rupee.
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Though a member of the board of Tata Sons since 1974, RNT’s appointment in 1992 as a successor to JRD 5 as
chairman of Tata Sons was a surprise to many, since he unlike the other contenders for the position, had not
demonstrated success. RNT said:
J.R.D. Tata had around him a team of senior managers, all of them people of substantial standing in their
respective spheres…I must confess that I did not feel any sense of joyousness on their part, because some
of them had aspirations to have the job themselves.xvii
The leaders of group companies who had experienced total freedom under JRD made it clear that they intended to
guard their turfs. Darbari Seth said:
The Tata group is a commonwealth of enterprises, not an empire. At the core, the system remains very,
very sound. There has always been an informal corporate centre, with a lot of interaction and
consultations.xviii
Nevertheless, when RNT revived an old policy that set the retirement age for executive directors at 65 years and for
non-executive directors at 75 years,6 these leaders complied. They gave up their executive positions and continued
as non-executive chairmen of the respective companies. Some like Russi Modi continued to be combative and had
to be let go.7 RNT agonized:
I don’t understand why Russi behaved the way he did. He was my friend. He was Jeh’s favorite. But he just
became totally unreasonable.xix
RNT’s elevation coincided with the liberalization of the Indian economy, which dramatically changed the country’s
industrial landscape. The ushering in of global competition prompted many to predict that Indian companies after
having operated in a protected economy for decades would lose out to new and agile competition. RNT first focused
on transforming the then two Tata flagships – TISCO (later renamed Tata Steel) and TELCO (later renamed Tata
Motors). He made significant investments in upgrading their technology, improved their cost and quality
competitiveness, and revamped their product portfolio. He said: “I made no effort to play a group role until TISCO
and TELCO were doing extremely well”.xx
When Tata Motors announced plans to foray into passenger cars, it met with considerable criticism. Analysts
considered the move very risky — something that could bankrupt the company — as the company had no experience
in designing cars. RNT disagreed:
I think risk is a necessary part of business philosophy...I think, as a group, we were risk averse and we hardly
grew because either it was not safe or no one else had done it before…We did everything in small
increments so we always lagged behind.xxi
Building Group Cohesion
RNT then turned his attention to the group, which he believed required more cohesion to stay relevant. He
explained:
5
JRD died a year later in November 1993.
6 The retirement policy, though established earlier, was not actively enforced until 1992. The retirement age for non-executive directors was
further lowered from 75 to 70 years in 2000 and increased back to 75 in 2007.
7 Darbari Seth, resigned as Chairman of Tata Chemicals, 4 months before he turned 75 years. Ajit Kerkar, Chairman and MD of Indian Hotels, was
forced to leave the board of the company when he turned 65 years in 1997.
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I think the group needed cohesion, or let me put that another way, the cohesion the group had was through
the persona of J.R.D. Tata, the patriarch. There was no institutionalized cohesion that existed, legally or
financially, without him. My concern was that after him, it would be difficult to hold it together.xxii
The lack of meaningful stakes in many of the Tata Group companies was, in particular, a matter of great concern.
RNT recalled:
There was a question whether we had the right to claim to manage these companies. In fact, we didn’t have
the legal right, or even the moral right, to manage them.xxiii
RNT progressively increased Tata Sons’ stake in the group companies. Tata Sons undertook a rights issue of its equity
shares and the various trusts renounced their rights in favor of the group companies which subscribed to the equity.
The money was in turn used to increase Tata Sons’ stakes in the group companies. Next, RNT turned his attention to
the brand. He reminisced:
I used to discuss the matter with JRD, why don’t we find a mechanism to pull ourselves together? At that
time, I was looking at a logo – not the new one – and was asking why don’t we use that as a glue and demand
things from companies and give things to companies. But he never really supported that because he felt
that it was not necessary. And from his standpoint, he was the patriarch, they were his team and there was
no need to do all this.xxiv
Now in the saddle of chairman himself, RNT required group companies to sign the Tata Brand Equity and Business
Promotion Agreement (BEBP) with Tata Sons in return for using the Tata name and logo. The agreement stipulated
that Tata Sons, the owner of the Tata name and brand logo, would promote the group brand and protect the
interests of the group companies, both in India and globally. The group companies had to pay an annual fee, meet
certain performance requirements, and comply with the Tata Code of Conduct (TCoC) which codified the group’s
transparent and ethical business practices.
The levy of brand fee was strongly criticized. One critic noted:
So many Tata branded products have flopped that the Tata brand is by no means a winner. The group’s
textile mills, and Tata Oil fell sick; Lakme was sold before it suffered a similar fate. Titan Watches and Indian
Hotels have prospered but neither carry the Tata name…Tisco and Telco have created the Tata reputation
and cynics will say they should demand money from Ratan Tata for giving his name such prestige and not
the other way around.xxv
RNT defended the move:
When a company would go to its bankers, it was part of the Tata group; when it went to seek a new
collaboration, the literature spent a long time talking about the Tata group of which it was a part. But after
those situations had been achieved the issue of being a member of the Tata group sort of slipped into a
lower grade.xxvi
Driving Excellence and Growth
In parallel, RNT also initiated reorganization and restructuring initiatives to improve group performance. The
existing businesses were organized into seven sectors,8 overlapping businesses across different affiliates were
consolidated, and some businesses were sold. Tata Sons formed a Group Executive Office (GEO) to improve
8The seven sectors were Materials, Engineering, Information Technology & Communications, Energy, Services, Consumer Products, and
Chemicals.
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coordination with the group companies.9 The GEO set up Business Review Committees (BRC), comprising
representatives from Tata Sons and external agencies such as financial institutions, for each of the group companies.
RNT explained:
[T]he BRC is not focusing on what is necessary for the Tata group… The BRC is focusing on trying to make a
company more profitable, more productive… the directors of the companies were concerned that this
would take away the autonomy of the board. It is not so. The BRC will, in fact, finally make its
recommendation to the board…the board will finally take its decision.xxvii
In addition to committing to TCoC, BEBP signatories were required to adopt the Tata Business Excellence Model
(TBEM) that benchmarked the Tata companies across core aspects of business operations and offered
recommendations for improvement. For instance, TBEM recommendations helped Tata Steel to become one of the
lowest cost steel producers in the world and helped Tata Motors turn around the early failure of Tata Indica, the
country’s first indigenously designed passenger car.
To fund further expansion of the group, Tata Sons took its information technology business, Tata Consultancy Services
(TCS) public. The proceeds (₹54.2 billion) were used to restructure the Tata Sons’ balance sheet, deepen its
involvement in existing group companies, and promote new ventures. A newly formed organizational unit, Group
Corporate Centre10 (GCC), led the efforts to identify new opportunities for the Tata Group. The group made its entry
into the telecom services through three companies – Tata Teleservices employing CDMA technology in partnership
with Japan’s NTT Docomo (NTT), GSM cellular services through a joint venture with AT&T and Birla Group (which it
later exited), and long distance network connectivity solutions through the acquisition of the public sector company,
Videsh Sanchar Nigam Limited (2002, later renamed Tata Communications). The group also forayed into DTH (Tata
Sky, 2010) and insurance business (TATA AIG, 2001) along with joint venture partners. It tied up with Starbucks to
foray into specialty coffee retailing (2011).
The GCC also spearheaded the global expansion efforts of group companies. In 2000, Tata Tea won the bid for the
global tea major Tetley Tea (price of $435 million). This was the group’s first international acquisition and the largest
cross-border takeover by an Indian company at that point in time. The acquisition transformed Tata Tea, a third of
the size of Tetley at the time of acquisition, to become the second largest tea company in the world. Thereafter, Tata
companies made a string of acquisitions over the next decade (see Exhibit 4). The GCC provided M&A advisory
support, helped the group companies mobilize capital, assessed whether the target company would fit into the Tata
values, provided post-acquisition integration support, and generally was the repository of knowledge and expertise,
transferring learnings from previous acquisitions to different group companies.
The biggest, and perhaps the riskiest, acquisitions by the group came in 2007-2008. Tata Steel acquired the UK-based
Corus for approximately $12 billion following a competitive bidding process (the initial bid of $.7.6 billion was
increased following a strong challenge by CSN, Brazil) to become the fifth largest steel producer in the world. Soon
thereafter, Tata Motors acquired the ailing car brands Jaguar and Land Rover from Ford for approximately $2.3 billion.
Though the aspirational nature of these acquisitions was recognized, not everyone was convinced about the viability
of the acquisitions. When the Corus acquisition was announced, the share price of Tata Steel fell by 11% as investors
worried that Tata Steel was overpaying, and that the debt incurred to fund the acquisition could affect the company’s
earnings for years.xxviii Similar reactions followed the JLR acquisition with analysts highlighting the failure of
experienced car markers Ford and BMW in turning around JLR. Ravi Kant, Vice Chairman of Tata Motors, disagreed:
9 The committee comprised Tata veterans — NA Soonawala, Director (Tata Sons), and Ishaat Hussain (Executive Director, Finance, Tata Steel and
later Director, Finance Tata Sons) — and new entrants to the Group, R Gopalakrishnan (Executive Director, Tata Sons & former vice chairman of
Unilever subsidiary in India), Kishore Chaukar (Managing Director of Tata Industries Limited & former head of ICICI, a leading financial institution)
and Manab Bose (Director, Human Resources, Tata Group and former head of Human Resources GE (India).
10 Initially, the GCC consisted of Ratan Tata and three other senior group executives – NA Soonawala, RK Krishna Kumar, head of Tata Tea and JJ
Irani, head of Tata Steel – from the board of Tata Sons. The GEO became an executive arm of GCC.
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People see us differently now, with greater respect. Doors that were closed earlier are now opening. People
are coming on their own from all corners of the world and making so many offers. It created a huge
impact.xxix
Unfortunately, the global financial crisis and ensuing recession in 2008 deeply impacted the profitability of the
acquisitions as demand for steel and premium vehicles collapsed. Tata Motors posted a loss of $520 million in FY2009
and Corus lost $303 million in FY2010, forcing the two companies to take many cost cutting measures to improve the
performance. While Tata Motors managed to make JLR profitable within the next few years, the problems at Corus
continued to linger due to weak global demand for steel.
At around the same time, Tata Motors also made a major investment to develop Tata Nano, which was to be the
world’s cheapest car priced at approximately $2500. RNT explained:
All along, the focus of entrepreneurs and corporations has been to develop products for
the top of the pyramid that has about 250-300 million people… the need of the hour is to create products
and services for the rest of the 1.2-billion Indians.xxx
Tata Nano attracted international attention and garnered 2,00,000 bookings in India quickly upon opening for orders,
but this did not translate into good sales. RNT said:
The Nano is something I would love to make successful…There has to be another push to make Nano what
it can be.xxxi
Succession
In August 2010, Tata Sons announced the formation of a committee 11 to select its next executive chairman as RNT
was set to retire in December 2012 upon reaching the retirement age of 75 years. However, the committee struggled
to find a suitable candidate. While some expected Noel Tata, RNT’s half-brother and Pallonji Mistry’s son-in-law to
be among the front runners, in November 2011, Tata Sons announced Cyrus Mistry as its next chairman. Mistry,
initially a member of selection committee, had recused himself and joined the fray upon the request of other
members who saw him as an ideal person for the role. A member of the board of Tata Sons since 2006 12 and an
alumnus of London Business School, Mistry had successfully grown SP Group’s construction business six-fold and
was known to possess a “stomach for the big fight”.xxxii Describing the choice as a “good and far sighted one”, RNT
said:
I have been impressed with the quality and calibre of his participation, his astute observations and his
humility. Don’t be fooled by his quiet demeanour. He is his own person, knows where he wants to be. I feel
confident that he will lead the group in a manner that is of the highest integrity. Cyrus is the right person
for the job, I welcome him.xxxiii
Dismissing notions that his larger-than-life persona would linger even after he retired, RNT said: “I don't think it is
right to have a ghost to shadow over somebody” and his advice to Mistry was: “you should be your own person, you
should take your own call and you should decide what you want to". xxxiv Mistry served as vice-chairman until
December 2012 when he took over as executive chairman with a tenure of 5 years. The board of Tata Sons conferred
the honorary title of chairman emeritus on RNT.
11 The committee comprised Noshir Soonawala (former vice chairman of Tata Sons), Shirin Bharucha (group legal advisor), Lord Kumar
Bhattacharyya (Warwick University Professor), R.K. Krishna Kumar, and Cyrus Mistry (directors of Tata Sons).
12
Pallonji Mistry had retired from the board in 2005.
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CYRUS MISTRY YEARS13
When Cyrus Mistry took over as chairman of Tata Sons, the group — with 60% of its revenue coming from outside
India — was still coping with the aftershocks of the 2008 global financial crisis. The Tata Group’s overall profitability
on its $58 billion capital employed stood at over 10% after tax, but most of this came from TCS and JLR.xxxv In the
financial year prior to Mistry taking over, 69% of the total capital employed in operating companies gave a return of
less than 10% after tax.xxxvi To improve the returns from the capital employed of operating companies, Mistry closed
plants, divested businesses, and shelved planned investments (see Exhibit 5). Although the need to restructure the
group’s portfolio and pare down the $26 billion debt that been raised to fund global acquisitions was obvious, the
challenge for Mistry, as one analyst noted, was to reorder the empire without making it look like an indictment of
past decisions and to ensure that the group remains to be one that dares to make big bets.xxxvii
Mistry reconstituted the Group Executive Council (GEC) 14 and with its help outlined the group’s strategy, which
included (a) future proofing the winners like TCS, JLR, Tata Elxsi, Titan, etc.; (b) turning around hotspots like the Corus
acquisition, and the telecom venture with NTT Docomo, etc., which were in trouble; (c) investing in growth platforms
to create non-cyclical businesses like consumer products and financial services; and lastly (d) seeding next generation
businesses in the digital and healthcare space such as Tata Cliq, Tata IQ, and Tata Health.xxxviii Mistry clarified that
the GEC was conceptualized as an “enabling think-tank” to support the leadership teams of the group companies
and not as a “super board”. He said:
It was always clear that the Managing Director of an operating company reported to the Board and
Chairman of that company, ensuring no confusion in accountability for performance. We created another
forum with wider participation called the Group Strategy and Policy Forum (“GSPF”). Here, we deliberated
policy framework with CEOs of the Tata Group companies before rolling out, to ensure alignment and
practicality of implementation.xxxix
Mistry’s push to restructure the group’s operations hit a snag when it came to Corus Steel and the troubled telecom
venture with NTT, both of which continued to bleed cash every year. As part of the joint venture agreement with
Tata Teleservices, NTT had the right to exit the venture at the lower of half the acquisition price or fair value. In July
2014, when Tata Teleservices’ net worth was completely eroded due to high debt, NTT exercised its option to exit
the venture at ~$1.2 billion, which was half the acquisition price. However, the exit became complicated since the
country’s central bank, the Reserve Bank of India (on advice from Ministry of Finance) blocked the outward
remittance of consideration since the extant laws of India did not allow for pre-determined valuation in such
contracts.xl At this stage, Tata Sons is reported to have made a settlement offer at 60% lower than the contractual
exit amount, a move which was interpreted as showing Mistry’s stinginess.xli NTT approached the London Court of
International Arbitration which ruled in favor of NTT in June 2016. Despite the arbitral award which India is obligated
to follow as a signatory to an international treaty, RBI failed to allow the outward remittance of the amount awarded.
Tata Sons contested the enforcement of the award before the Delhi High Court but also, as a show of good faith,
deposited the award amount with the court registrar while the court decided the matter. It was later revealed that
the deposit was made as a result of the trustees of Tata Trusts “showing extreme anxiety to unconditionally deposit
the money”, even as Tata Sons was internally determining the legal strategy.xlii The deposit was also made to ring
fence the problem, and importantly, enable Mistry to go ahead with the plans to enter into a joint venture with
Vodafone, the global telecom major. Nirmalya Kumar, who oversaw the group’s strategy, explained the planned
deal:
13
This section is partially derived from the earlier case ‘Leading the Tata Group (B): The Cyrus Mistry Years’ by K S Manikandan, K Rajyalakshmi,
and J Ramachandran (https://hbsp.harvard.edu/product/IMB599-PDF-ENG).
14 The new GEC replaced the old GCC and GEO. It now comprised new inductees from outside the group – Dr. Nirmalya Kumar (Professor of
Marketing, London Business School), Madhu Kannan (former CEO of Bombay Stock Exchange) and Dr. NS Rajan (partner, EY Consulting) – and
two members of the TAS cadre: Harish Bhat (TAS-1987) and Mukund Rajan (TAS-1995).
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[The deal was] …we would give them Tata Sky, Tata Communications and Tata Teleservices all three. In
return, they would give us a substantial but not a majority stake in Vodafone India… the outcome of this
was a company, Vodafone India, which would be number one in direct to home, number one in the
enterprise business and number two in telephony, and we would have a substantial stake with a partner
who's a global leader in this industry and committed to this industry…we needed to solve the Docomo
problem before it happened.xliii
Likewise, Mistry’s plans to turn around Tata Steel’s European operations by spinning it off into a joint venture with
Germany’s Thyssenkrupp got delayed because of the conditions imposed by the latter. Nirmalya Kumar outlined the
conditions:
Thyssen said we are not going to touch you until you fix four things. Number one, you get rid of the weak
plants in UK. Number two, you do the cost restructuring to get the cost down. Number three, you invest in
these remaining plans that they become world class and number four, you solve the pension plan 15… we
are happy to do the deal after that. So, for three years, Kaushik16 and his team worked non-stop to get these
things done. xliv
Mistry’s efforts to turnaround Tata Motors also received a setback when its CEO Karl Slym died in January 2014. The
company not only struggled to increase the sales of Nano, it also began losing market share in both commercial and
passenger vehicles in India.xlv Nirmalya Kumar said:
The commercial vehicle business of Tata Motors was so strong, that it had become both complacent and
arrogant… so, the turnaround in the culture had to take place… cost restructuring… quality improvement …
there were multiple problems that needed to be solved at the same time. xlvi
To stem the losses and improve performance of Tata Motors, Mistry set up a corporate steering committee with him
as the head to provide “oversight of strategy and key aspects of the company’s operations”.xlvii Though set up as an
interim measure, this setup continued until Guenter Butschek was appointed as the new CEO in February 2016.
Meanwhile, in 2014-2015, Mistry unveiled Vision 2025 setting ambitious targets for the group in the coming decade:
(i) to be among the global top 25 in terms of market capitalization, (ii) to reach 25% of the global population, and
(iii) to be among 25 globally admired corporate and employer brands by 2025. He also announced an investment of
$35 billion over the next 3 years. Four major areas – defense, financial services, realty & infrastructure, and retail –
were identified for investment. The group also made forays in airlines industry with the launch of Air Asia India, a
low-cost airline in a joint venture with Air Asia, Malaysia, and Vistara, a full-service airline in a joint venture with
Singapore Airlines. The group applied for a retail banking license but decided to withdraw its application citing
restrictive regulations and its impact on financing the group’s operations.xlviii
The group also invested in the growth of its existing affiliate firms. Mistry backed Tata Steel’s ₹250 billion investment
in a greenfield facility in India. Another major deal was Tata Power’s acquisition of Welspun Renewables Energy
Private Limited in June 2016 for approximately $1.38 billion.xlix This deal resulted in Tata Power becoming the second
largest producer of renewable energy in India.l
In September 2016, The Economist in a scathing reviewli termed Tata Group’s performance under Mistry ‘listless’.
The group’s intent to expand into further ventures instead of slimming down was criticized. The article also
15 Tata Steel UK was responsible for pension payments to more than 82,000 pensioners as part of the British Steel Pension Scheme. The amount
held by the Scheme was invested in bonds and equities, but insufficient investment returns could result in shortfall in the amounts to be paid out
to pensioners. Any such shortfall was to be borne by Tata Steel. The deficit was estimated to be around GBP 700 million, potentially going up to
GBP 1.5 billion, and was costing more than GBP 100 million a year to support. Tata Steel was in consultation with the UK Government to separate
the scheme from Tata Steel UK.
16
Kaushik Chatterjee was CFO of Tata Steel.
Page 9 of 22
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wondered if the group structure was inefficient. Mistry disagreed. In an interview, Mistry explained the distinctive
character of the business group structure:
It is useful to note that the way in which a diversified business group such as Tata adds value is different
from conglomerates or private equity funds…From a nurturing perspective, the Tata brand, developed over
15 decades, adds huge value to our companies. This also makes exits more difficult as the Tata group has a
deeper commitment to stakeholders and the brand cannot be transferred. On the other hand, the group
can leverage resources across its large talent and leadership pools. With its global spread and reputation,
it can capitalise on opportunities inaccessible to individual companies.
From a synergy perspective, even within the restrictions of separated legal entities, there are many
opportunities for two-sided or win-win synergies, where companies act in their self-interest and enjoy
mutual benefits. The sharing of best practices is an example where we have platforms for the synergistic
benefit of diverse businesses. Private equity funds are rarely able to tap into such synergies, due to the
imperatives of individual exits. Lastly, from a portfolio perspective, the group can take decisions with longer-
time horizons for value creation. For instance, this allows the incubation of next-generation businesses with
long gestation periods, whereas private equity funds have average lives of seven years to exit.
When compared with conglomerates, on the other hand, Tata companies benefit from the nurturing
provided by their independent boards. The boards add a lot of value from deep domain expertise and
through strategic guidance and good governance. At the group level, we have recently come out with our
‘corporate governance guidelines’, which provide a framework on the effectiveness of boards, and
articulate the agendas of the critical board committees.lii
He added:
There will always be external influencers and so-called experts, who may be motivated by immediate
transactional gains, goading us on to churn our portfolio. It is important that we develop our own prognosis
based on knowledge and context, keeping all stakeholders in mind. We should not be afraid of taking tough
decisions for the right reasons, with compassion.liii
Even as Mistry fended off ‘external influencers’, he seemed to indicate that he had RNT’s backing:
I continue to interact with Mr. Tata, who is also the Chairman of the Tata Trusts, our largest shareholder. I
need to ensure there is good alignment on strategy between Tata Sons and the Tata Trusts. liv
The events that followed clearly suggest Mistry misread the degree of alignment with RNT and the Trusts.
THE OCTOBER SHOCK
A few moments prior to the scheduled board meeting of Tata Sons on October 24, 2016, Mistry received an
unscheduled visit from Nitin Nohria, Dean of Harvard Business School and a Tata Trust nominated director on the
board of Tata Sons, and RNT.lv Referring to the growing discord between Mistry and RNT, he offered Mistry the
choice to either resign voluntarily or be voted out by the board.lvi After Mistry refused to resign, the board of
directors voted him out of the position. Seven out of the eight directors on the board other than Mistry voted in
favor of his removal while 1 independent director (Farida Khambata) abstained.lvii RNT was appointed as an
additional director and elected as the interim chairman and a five-member selection committee including RNT was
formed to choose the next chairman within four months. A shocked Mistry, who decided to remain as a member of
the board, said:
Page 10 of 22
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To "replace" your Chairman without so much as a word of explanation and without affording him an
opportunity of defending himself in a summary manner must be unique in the annals of corporate
history...lviii
Any hope of a smooth transition was shattered a few days later when a letterlix that Mistry had written to the board
after his ouster was leaked to the press. In the letter, Mistry stated that the board did not appreciate the extent of
the problems inherited by him given that he also became aware of them only after he became the chairman. The
primary issue pertained to the ‘legacy hotspots’ (Tata Steel, IHCL, Tata Steel, Tata Teleservices, and Tata Power) that
required him to make several exits or take impairments over the past 4 years, but he maintained that a realistic
assessment could result in a further write-down of ₹1180 billion over time. He also claimed that the two airline joint
ventures were forced on him as a result of RNT’s passion for the aviation sector.
Though the board minutes or the initial press statements of Tata Sons offered no reasons for Mistry’s removal, the
company later offered an elaborate justification for the decision. Tata Sons stated that excluding the results of TCS
to which Mistry made no managerial contribution, the dividends received by Tata Sons from other Tata companies
had declined from ₹10 billion in 2012-13 to ₹6.8 billion in 2015-16, while expenses had steadily grown in these
years.lx Impairment provisions also increased from ₹2 billion in 2012-13 to ₹24 billion in 2015-16, which indicated an
inability to stem falling values and turn around ‘hotspots’.lxi A drop in the market share of Tata Motors and increase
in group indebtedness from ₹698.77 billion to ₹2257.40 billion over 4 years without increase in profits were cited as
other failures which led to his removal.lxii The statement referred to critical reports that the company had received
on the handling of the Tata Steel Europe’s problems and the negotiations with NTT. Tata Sons also stated that Mistry
used the strong public relations network of Tata Group to repeatedly highlight the major problem areas inherited by
him (by terming them ‘legacy issues’ or ‘hotspots’) to account for any perceived lack of performance by him. They
argued that he continued to cite these as ‘legacy’ problems even after 4 years of full-time involvement and executive
authority.
The breakdown of relationship with Tata Trusts was another reason put forward to justify Mistry’s removal. Tata
Sons argued that Mistry’s actions displayed disregard for the articles of association of the company and the rights of
majority shareholders. Tata Sons also stated that Mistry attempted to take control of the operating companies to
the exclusion of Tata Sons by ensuring that he was the only common director.lxiii Tata Sons had historically exercised
control over group companies by commonality of senior directors and its shareholding which acted as a binding force
in the group for many years and enhanced credibility and creditworthiness of group companies.lxiv The new structure
of him being the only common director and thereby controlling the operating companies was described as
unacceptable to Tata Sons and its majority shareholder, Tata Trusts.lxv
Ouster from the Boards of Group Companies
Though removed as chairman of Tata Sons, Mistry remained the chairman of several group companies. While the
boards of Tata Global Beverages, Tata Steel, and TCS also voted to remove him as their chairman,lxvi the boards of
group companies like Indian Hotels (IHCL) and Tata Chemicals reposed their faith in Mistry. The statement of
independent directors of IHCL said:
Taking into account board assessments and performance evaluations carried out over the years, the
independent directors unanimously expressed their full confidence in the chairman, Cyrus Mistry, and
praised the steps taken by him in providing strategic direction and leadership to the company. lxvii
Page 11 of 22
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Tata Sons, seeing mixed results in handling the matter at the boardroom level, decided to call for a shareholder
meeting at each of the relevant Tata companies to remove Mistry as a director and not merely as a chairman.17 RNT
justified the move:
The right step would have been for him [Mistry] to resign as director. Unfortunately, he has not yet done
so and his continued presence as a director is a serious disruptive influence on these company boards,
which can make the company dysfunctional, particularly given his open hostility towards the primary
promoter, Tata Sons. lxviii
Tata companies advised their shareholders on the benefits provided by Tata Sons to the companies and the risks of
losing the support of Tata Sons. For instance, Tata Power drew attention of its shareholders to the clause in the offer
letter that mentioned the possibility of termination of Tata Brand Equity and Business Promotion Agreement and
the consequent lack of access to the ‘Tata’ brand that could materially impact the reputation and business prospects
of the company.lxix Mistry reached out to institutional and individual shareholders citing his performance as
chairman. However, he could not galvanize enough support. Between December 12 and 14, 2016, Mistry was
removed from the boards of Tata Industries, TCS, and Tata Teleservices. Mistry claimed a ‘moral victory’ as nearly
70% of the non-promoter shareholders in TCS either voted against the proposal to remove him from the board or
abstained from the vote.lxx He then decided to resign from the boards of other Tata companies and approach the
courts to get relief. Mistry approached NCLT complaining that the actions of the directors of Tata Sons, Tata Trusts,
RNT, and other stakeholders resulted in decisions taken against the interest of Tata Sons and its minority
shareholders.
CHANDRASEKARAN YEARS
Natarajan Chandrasekaran (Chandra), the CEO of the group company TCS, was immediately appointed to the board
of Tata Sons after the removal of Mistry as chairman of Tata Sons. While RNT had been appointed as an interim
chairman after the removal of Mistry, the board of Tata Sons appointed Chandra in January 2017, as the executive
chairman of Tata Sons.
Chandra, who said his immediate priority was to “stop the bleeding in major areas”,lxxi met with early success with
the telecom business. In February 2017, Tata Sons withdrew its objection against enforcement of the arbitration
award and both companies approached Delhi High Court for a joint resolution. Tata Sons bought back NTT’s stake
for approximately $1.2 billion with the approval of the Delhi High Court which rejected RBI’s objections to the
payment. Thereafter, the consumer mobile business of the company was merged with Bharti Airtel on a “cash free-
debt free basis”.lxxii Nirmalya Kumar said:
By the time the Docomo problem was solved, Cyrus had been fired and then Vodafone said we are not
interested in this deal anymore…so the only deal that was available was the Bharti…They [Airtel] got 40
million customers and all the spectrum for free.
However Chandra’s efforts to exit Corus, which Nirmalya Kumar believed was straight out of Mistry’s strategy
playbook, did not yield results as the European Commission blocked the proposed 50:50 joint venture between
ThyssenKrupp and Tata Steel’s European operations by citing monopoly concerns.lxxiii
Asked about his plans for Nano, Chandra said:
… People are targeting Nano for no reason. Tata Motor’s passenger car division has multiple models…the
only model that makes money is Indica. Every other model makes a loss. And Nano loss, on a yearly basis is
17Tata Sons also sought to remove Nusli Wadia, a long-standing independent director who supported Mistry in the boards of Tata Chemicals,
Tata Motors, and Tata Steel. Wadia sued RNT and Tata Sons for defamation. Following the suggestion of the Supreme Court, the parties settled
the matter out of court after RNT clarified in a statement that there was no intention to defame Wadia.
Page 12 of 22
2022.
less than 4 percent of the total loss of the passenger cars division. So, whether you shut down Nano or give
it a life, numbers are not going to changelxxiv.
He added:
The team is working extremely hard … we are definitely on the move. …the recent models have got a lot of
traction…I think we will come back strong both in terms of market share and performance. lxxv
Apart from arresting losses in major hotspots and divesting small entities like Advinus Therapeutics (clinical research)
and Tata Petrodyne (oil and gas exploration and production), Chandra sought to improve returns through disciplined
capital allocation.lxxvi Toward this, he adopted a ‘One Tata’ approach:
‘One Tata’, to my mind, is a mindset that brings the best of the group together for every opportunity. We
are privileged to have a large and unique ecosystem to leverage ideas, knowledge, expertise, and scale as
we work together to create disruptions.lxxvii
Realizing that the complexity of the group will come in the way of ‘One Tata’, he called for a focus on “simplification,
synergies and scale” to “achieve peak performance”.lxxviii He said:
I will be the first to admit that we are very complex. We need to be simplified. Looking at the businesses, I
would like to see ourselves as 5, 6, 7 groups as opposed to 110 companies. The more we see ourselves as
110 or 120 companies, nothing will be done. So, whether it is a consolidation or a virtual view, whether it
is reducing the subsidiaries, all options should be explored. Once you do that simplification, it is a question
of creating four tools – communication, thinking together, systems and processes and initiatives. At the
end, you have to create value.lxxix
As a part of Chandra’s Simplify-Synergize-Scale strategy, the group initiated moves to increase Tata Sons’ stake in the
Tata Group companies and simplify the shareholding structure by reducing crossholdings.lxxx The group also
consolidated related businesses spread across various group companies to realize benefits of scale. Tata’s defense
businesses that were dispersed across multiple affiliate firms such as Tata Advanced Systems, Tata Advanced
Materials, Tata Industrial Services, Tata Power, Tata Motors, Tata Consultancy Services, Tata Steel, and Titan were
consolidated under a new entity, Tata Aerospace and Defence.lxxxi Likewise, the consumer business (salt, pulses,
spices and detergents) of Tata Chemicals was merged with Tata Global Beverages (tea) and the latter was renamed
as Tata Consumer Products.lxxxii The group also announced plans to streamline its real estate and infrastructure
businesses that were spread across two different entities.lxxxiii Chandra’s ‘One Tata’ initiative got another boost when
Tata Motors announced that it would partner with other group companies such as Tata Power, Tata Chemicals, Tata
Autocomp, TCS, and Croma (white goods retailer) to develop an electric vehicle ecosystem in the country, Tata
UniEverse.
Organizationally, the group companies were classified into 10 business clusters.18 It was reported that each cluster
would be headed by someone with deep sector knowledge who would act as an interface between Tata Sons and
the companies in the cluster and facilitate coordination among companies within the cluster. Regarding his
relationship with Tata Trusts and RNT, Chandra remarked:
When you are managing a group like Tata, every decision you take has to take into account many aspects.
I have to carry my board, operating company board and if, for example, I have to take a decision which is
very important, it is not that I worry what will Ratan Tata say. I will go and reach out and ask, this is what I
think and seek his opinion. Because you have to respect the fact that he has seen this all. But it doesn’t
mean I go and ask him for everything. If I feel it is important enough, I will go and ask. lxxxiv
18The 10 business clusters were Information Technology, Steel, Automotive, Consumer and Retail, Infrastructure, Financial Services, Aerospace
and Defense, Tourism and Travel, Telecom and Media, and Trading and Investments.
Page 13 of 22
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RNT approved Chandra’s approach and added that “the new leadership is much more action-oriented in dealing
with the problems."lxxxv He also said:
[Formal communication] was starting to be the only way we were communicating with Mr. Mistry. I hope
we don't go to formal-formal communication as the normal communication [with Chandrasekaran] as we
look into the future.lxxxvi
With respect to communication with RNT and Mistry being less action oriented, Nirmalya Kumar said:
[Mistry] had 28 meetings with Ratan Tata over his three and a half years… each meeting was about three
to four hours long… so on average, you're spending a lot of time trying to convince him, but you know,
sometimes people forget that the job of communicating to Ratan Tata, what Tata Sons was doing was not
Cyrus Mistry's job at some level. It was the job of the two trustees of Tata Sons who were sitting on the Tata
Sons board. lxxxvii
… one very important point to remember is when Cyrus Mistry was taking steps, he was not revealing to
the press what steps he is taking… [there were] two reasons not to go to the press to talk about these
restructurings. Number one, it will make Ratan Tata look bad in the press. We don't want him to feel
embarrassed. And number two, it will make the employees of the other struggling divisions feel uneasy.lxxxviii
Nirmalya Kumar added that Mistry too considered the ‘cluster strategy’ but found it was riddled with governance
challenges. He explained:
There is a board of directors in charge of the operating company where the minority shareholders rights
are also represented. Instead, we are going to have a forum which is the cluster forum, we're going to have
a forum which is the Tata Sons board and we have we have a forum at the Tata Trusts, all of which are going
to say what should be done at the operating company level!...And the CEO is thinking …Do I report to my
board? Do I report to Tata Sons? Do I report to Tata Trusts? Or do I report to the cluster head? lxxxix
Indeed, these governance related issues were central to the disagreement between the two company law tribunals
in the legal battle between Mistry and Tata Sons. The issue rested with the Supreme Court of India following the
appeal of Tata Sons against NCLAT orders.
Page 14 of 22
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Exhibit 1
Performance of top Tata Group Companies | 1992–2019
(In ₹ billion)+ Total Income Debt PBDITA

1992 2012 2016 2019 1992# 2012 2016 2019 1992# 2012 2016 2019
Company #
Tata Motors 31 1717 2797 3053 10 475 694 1061 4 233 400 (5.8)
Tata Steel 28 1409 1355 1694 20 599 819 1008 6 174 110 323
TCS N.A. 497 1117 1517 N.A. 2 2 0.6 N.A. 153 338 449
Tata Power 5 264 317 357 6 338 388 485 1 40 70 98
Tata 6 143 189 166 0 111 142 99 2 20 29 29
Communications
Tata Chemicals 4 142 176 127 6 70 90 62 1 25 25 26
Titan Company 1 90 114 199 1 0.1 1 23 0.4 9 10 23
Tata Consumer 3 68 67 74 1 9 13 11 1 7 4 9
Products
Voltas 6 54 59 73 1 2 2 3 0.6 3 6 8
Indian Hotels 2. 35 41 46 1 38 45 23 0.6 6 6 9
(In ₹ billion) PAT Market Capitalization*

Company 1992# 2012 2016 2019 1992# 2012 2016 2019
Tata Motors 1 135 111 (289) 65 845 1614 571
Tata Steel 2 49 (3) 88 138 416 413 568
TCS N.A. 105 243 315 N.A. 2463 4783 8110
Tata Power 0.3 (9) 6 24 5 261 226 152

Tata Communications 1 (7) 0.1 0.7 - 67 190 112
Tata Chemicals 0.6 10 9 12 29 89 147 169

Titan Company 0.1 6 6 13 4 252 334 1054
Tata Consumer Products 0.5 4 (0.3) 4 18 98 97 202
Voltas 0.1 1 3 5 4 35 130 218

Indian Hotels 0.2 0.3 (1.8) 2 7 50 128 172
(# All data for 1992 is as per the standalone financial statements; *Market Capitalization data is as per the share price on the following dates:
March 31, 1992, December 31, 2012, October 24, 2016, and December 31, 2019; +All numbers are rounded down to the nearest ₹ billion.)
Source: CMIE Prowess
Page 15 of 22
2022.
Exhibit 2
Shareholding pattern in top Tata Group Companies
Shareholding (%) 2002 2012 2019 Shareholding (%) 2002 2012 2019
Indian Hotels Company Tata Motors
Tata Sons 14.92 20 36.59 Tata Sons 20.92 26.07 35.3
Tata Companies 2.86 3.18 2.45 Tata Companies 9.37 8.66 2.95
Others a 82.22 76.82 60.96 Others 69.71 65.27 b 61.75
Tata Chemicals Tata Power
Tata Sons 10.14 19.89 23.99 Tata Sons 28.74 29.89 31.12
Others 71.43 69.1b 69.42 Others 68.39 68.23 b 67.03
Tata Communications Tata Steel
Tata Sons 25 43.32 48.85 Tata Sons 19.86 29.93 31.81
Tata Companies 0 4.71 0 Tata Companies 4.68 1.32 1.26
2022.
Others 75 51.97 51.15 Others 75.46 68.75 b 66.93
TCSd Titan Company
Tata Sons NA 73.75 72.01 Tata Sons 7.42 11.41 21.39
Tata Companies NA 0.14 0.02 Tata Companies 17.24 14.11 3.61
Others NA 26.11b 27.97 Others 75.34 74.48 75
c
Tata Consumer Products Voltas
Tata Sons 15.06 26.65 30.06 Tata Sons 20.31 22 27.21
Others 71.24 64.8 65.57 Others 75.8 75.05 69.71
a
Tata Trusts held 17.5% in Indian Hotels in 2002 and 10.39% in 2012.
b
Tata Trusts held between 0.02% and 0.2% shares.
c Tata Consumer Products was formerly Tata Global Beverages Limited.
d TCS was unlisted until 2004.
Source: CMIE Prowess
Page 16 of 22
Exhibit 3
Tata Family Tree
2022.
Source: K S Manikandan, K Rajyalakshmi, and J Ramachandran, ‘Leading the Tata Group (A): The Ratan Tata Years’ (https://hbsp.harvard.edu/product/IMB597-PDF-ENG).
Page 17 of 22
Exhibit 4
Select global acquisitions by Tata Group companies under Ratan Tata
Year Tata Company Acquired Company Country Stake Value

acquired $Mn
2000 Tata Tea Tetley Group United Kingdom 100% 433.6
2004 Tata Motors Daewoo Commercial Vehicle Co. Korea 100% 102
Tata Communications Tyco Global Network United States 130
2005 Tata Steel NatSteel Asia Singapore 100% 285.4
Tata Motors Hispano Carrocera Spain 21% 16.1
Indian Hotels The Pierre United States Lease 9
Tata Communications Teleglobe International United States 239
Indian Hotels W Hotel (Sydney) Australia 100% 29
Tata Chemicals Brunner Mond United Kingdom 64% 111.6
2006 Tata Chemicals Brunner Mond United Kingdom 37% 65.4
Tata Steel Millennium Steel Thailand 67% 167
2007 Indian Hotels Ritz-Carlton Boston, US 100% 170
Tata Steel Corus UK 100% 12100
Indian Hotels Hotel Campton Palace US 100% 58
Tata Power PT Kaltim Prima Coal and PR Indonesia 30% 1100
Arutmin
2008 Tata Chemicals General Chemical Industrial US 100% 1005
Tata Motors Jaguar Land Rover UK 2300
TCS Citigroup Global Services US 100% 512
2009 Tata Communications Neotel South Africa 30%
Tata Motors Hispano Carrocera Spain 79%
2010 Tata Communications BT group's mosaic business UK 100%
Tata Chemicals British Salt UK 100% 231.8
2011 Tata Chemicals Olam International Gabon 25.10% 290
Source: Tata website; Author research; not exhaustive
Page 18 of 22
2022.
Exhibit 5
Details of restructuring and asset impairment of select Tata companies | 2013-2016
Tata Steel:
2013: Sells 50% stake in the ₹ 50 billion Dharma Port in Odisha to Adani. Sells land parcel in Mumbai to Oberoi for ₹ 1.1
billion. Took ₹ 83.56 billion impairment charge against Corus.
2014: Shelved $5 billion plan to build a new steel plant in Vietnam. The company also announced a non-cash write-down
of ₹ 15.77 billion for its Benga (Mozambique) project investment.
2015: Took ₹ 6.5 billion impairment charge for loss of value of operations in Europe, Canada, and Mozambique in 2014-
15.
2016: Sold UK firm Greybull Capital (an investment company that specializes in turning round struggling companies) to
sell loss-making 4.5 million ton long-product Scunthorpe steel plant (including liabilities) in Britain, for a nominal 1 British
pound.
Tata Motors:
2013: Tata Motors closes its bus and coach manufacturing unit in Spain, following mounting losses in its Tata Hispano
Motors in Spain. Takes an impairment charge of ₹ 7 billion.
Tata Chemicals:
2013: Tata Chemicals closed its soda ash and calcium chloride plant at Winnington in the UK.
2014: Tata Chemicals moth-balled its loss-making 200-ton premium soda ash plant in Kenya.
2016: Tata Chemicals sold its urea business Indian unit of Norway-based Yara International ASA for ₹ 26.7 billion.
Indian Hotels:
2013: Dropped $1.2 billion bid to acquire Orient Express Hotels. Indian Hotels was trying to acquire Orient Express for 5
years. The company took a ₹ 6.6 billion impairment charge on its assets citing net worth erosion caused by global
recessionary conditions.
July 2016: Sold Taj Boston Hotel for 8.4 billion. Will continue to manage the hotel under a long-term management services
agreement. The property was acquired in 2006 and has never made profit ever since.
Tata Communications
May 2016: Sold 74% stake in its data center business to a unit of Singapore’s Temasek Holdings for approximately ₹46.20
billion.
June 2016: Sold majority stake in South African internet subsidiary Neotel for about ₹ 19.92 billion.
(₹ = Indian Rupee)
Source: Author research; Not exhaustive
Page 19 of 22
2022.
ENDNOTES
i Cyrus Investments Private Limited & Anr. V Tata Sons Limited & Ors., National Company Law Tribunal, Mumbai, C.P. No. 82(MB)/2016
(hereinafter “NCLT Order”)
ii Cyrus Investments Private Limited/Cyrus Pallonji Mistry v Tata Sons Limited & Ors., National Company Law Appellate Tribunal, New Delhi,
Company Appeal (AT) Nos. 254 & 268 of 2018 (hereinafter “NCLAT Order”).
iii NCLAT Order, p 166-167.
iv https://www.tata.com/community
v Deepali Gupta, Tata vs Mistry: The Battle for India’s Greatest Business Empire, (Juggernaut Books 2019), p 31. (hereinafter “Deepali Gupta”).
vi “Inside the fault lines of Mistry versus Tata”, Live Mint, February 12, 2020, <https://www.livemint.com/companies/people/inside-the-fault-
lines-of-mistry-versus-tata-11581441853771.html>
vii Deepali Gupta, p 32.
viii Ibid.
ix Ibid.
x
Deepali Gupta, p 32-33.
xi Sundar Sarukkai, JRD Tata and the idea of trusteeship <http://eprints.manipal.edu/78163/1/Zoroastrianism_-
_JRD_Tata_%26_the_idea_of_trusteeship-_SS-textbook.pdf>
xii Bakhtiar K. Dadabhoy, Jeh’ A life of JRD Tata, (Rupa Publications, 2005).
xiii
R.M. Lala, The Creation of Wealth: The Tatas from the 19th to the 21st Century, (Penguin, 2006).
xiv
Ibid.
xv Business India, December 6-17, 1993.
xvi
Ratan Tata interview, <http://www.virsanghvi.com/People-Detail.aspx?Key=3>
xvii ‘Ratan Tata: A journey in four stages’, Live Mint, December 28, 2012,
<http://www.livemint.com/Companies/n47iePUboPWvCqG5FM8IVK/Ratan-Tata-A-journey-in-four-stages.html>
xviii “Tata Empire goes through a period of transition amidst expansion”, India Today, October 15, 1988, <
http://indiatoday.intoday.in/story/tata-empire-goes-through-a-period-of-transition-amidst-expansion/1/329886.html>
xix
Ratan Tata interview, <http://www.virsanghvi.com/People-Detail.aspx?Key=3>
xx The Tata Emperor, Asiaweek, January 24, 1997, <http://edition.cnn.com/ASIANOW/asiaweek/97/0124/biz1.html> last accessed in 2012.
xxi
Vision of the future, Ratan Tata interview, 2006, http://www.tata.in/article/inside/JVypZzs7GuQ=/TLYVr3YPkMU=
xxii “Online Extra: Rata Tata’s Trials and Triumphs”, Bloomberg, July 26, 2004, <https://www.bloomberg.com/news/articles/2004-07-25/online-
extra-ratan-tatas-trials-and-triumphs>
xxiii Morgen Witzen, Tata: The Evolution of a Corporate Brand, (Penguin India, 2018).
xxiv
Ratan Tata interview,< http://tata.com/media/interviews/inside.aspx?artid=+aChutu5R14=> last accessed in 2012.
xxv “The Insecure Tata”, Outlook, September 15, 1997, < https://www.outlookindia.com/magazine/story/the-insecure-tata/204246>
xxvi ‘Remaking Tata’, Business World, September 13, 1999.
xxvii
Ibid.
xxviii “Tata’s Corus Deal Raises Fears About Likely Heavy Debt Loan”, The Wall Street Journal, February 1, 2007,
<https://www.wsj.com/articles/SB117023684266393541>.
xxix
“Interview with Ravi Kant: We’ve only touched the fringes; the future is going to be explosive”, Tata.com, February 2006.
xxx “Tata group innovating affordable products for masses”, The Economic Times, May 27, 2009.
xxxi “Ratan Tata seeks to speed up Nano after slow start’, The Economic Times, August 22, 2012, <https://economictimes.indiatimes.com/ratan-
tata-seeks-to-speed-up-nano-after-slow-start/articleshow/15594850.cms?from=mobile&from=mdr>
xxxii
“The Mystery Man”, Outlook, December 5, 2011, <https://www.outlookindia.com/magazine/story/the-mystery-man/279087>.
xxxiii Harish Bhat, Tata Log: Eight Modern Stories from a Timeless Institution, (Penguin, 2016).
xxxiv “Be your own man: Ratan Tata’s advice to Cyrus Mistry”, The Hindu BusinessLine, December 14, 2012,
<http://www.thehindubusinessline.com/companies/be-your-own-man-ratan-tatas-advice-to-cyrus-mistry/article4199321.ece>
xxxv “From pupil to master”, The Economist, December 1, 2012, <https://www.economist.com/business/2012/12/01/from-pupil-to-master>
xxxvi Ibid.
xxxvii “Two years of Cyrus Mistry”, Fortune India, December 5, 2014, <https://www.fortuneindia.com/people/two-years-of-cyrus-mistry/100454>
xxxviii “Nirmalya Kumar Speaks Out | Tata Boardroom Battle”, ET Now, November 23, 2016, <
https://www.youtube.com/watch?v=WBTAcSa7RaE>
xxxix Representation Made by Cyrus Mistry to the Board of Tata Power, December 5, 2016, p 4.
xl “Tata offers to buy out Docomo at Rs 23.3 a share”, Business Standard, July 20, 2015, <https://www.business-
standard.com/article/companies/tata-offers-to-buy-out-docomo-at-rs-23-3-a-share-115071900208_1.html>
xli
Deepali Gupta, p 207.
xlii “How Ratan Tata changed tracks on Docomo to lead settlement talks”. Live Mint, March 1, 2017, <
https://www.livemint.com/Companies/6hk3AyarCr4OexFCRQk1IM/Docomo-deal-How-Ratan-Tata-changed-track-to-lead-settlement.html>
xliii “Cyrus Mistry's Key Aide Nirmalya Kumar Opens Up On Sacking”, ET Now, October 30, 2017,
<https://www.youtube.com/watch?v=sjw7RiJxEYg>
xliv “Cyrus Mistry's Key Aide Nirmalya Kumar Opens Up On Sacking”, ET Now, October 30, 2017,
Page 20 of 22
2022.
xlv ‘Cyrus Mistry’s to ix list remains formidable’, Business Standard, December 27, 2014, https://www.business-
standard.com/article/companies/cyrus-mistry-s-to-fix-list-remains-formidable-114122600722_1.html
xlvi “Cyrus Mistry's Key Aide Nirmalya Kumar Opens Up On Sacking”, ET Now, October 30, 2017,
xlvii ‘Mistry will head interim panel steering Tata Motors’ The Hindu Businessline, February 6, 2014,
https://www.thehindubusinessline.com/companies/mistry-will-head-interim-panel-steering-tata-motors/article20722989.ece1
xlviii “Decoder: Why running a bank did not make sense for Tata Sons”, Firstpost, December 21, 2014,
<https://www.firstpost.com/business/decoder-why-running-a-bank-did-not-make-sense-for-tata-sons-1254851.html>
xlix
“Tata Power at No. 2 in renewable energy sector after Welspun deal”, Live Mint, June 14, 2016,
<https://www.livemint.com/Companies/k3OCSo45jNUzJPlrm1vSRJ/After-Welspun-deal-Tata-Power-at-No-2-in-renewable-energy.html>
l Ibid.
li “Mistry’s Elephant”, The Economist, September 24, 2016, <https://www.economist.com/business/2016/09/24/mistrys-elephant>
lii
“Full text of the Cyrus Mistry interview that the Tata Group junked”, Firstpost, October 26, 2016,
<https://www.firstpost.com/business/exclusive-full-text-of-the-cyrus-mistry-interview-that-the-tata-group-junked-3073318.html>
liii Ibid.
liv Ibid.
lv Nirmalya Kumar, “How Cyrus Mistry was Fired as Tata Chairman”, October 21, 2017, <https://nirmalyakumar.com/2017/10/21/how-cyrus-
mistry-was-fired-as-tata-chairman/>
lvi Ibid.
lvii
Tata Sons, Board Minutes.
lviii “FULL TEXT: Letter sent by Cyrus Mistry, former Chairman of Tata Group, to directors of Tata Sons”, Reuters, October 25, 2016,
<http://in.reuters.com/article/tata-sons-management-idINKCN12R142>.
lix “Full Text of Cyrus Mistry’s letter to Tata Sons Board”, Business Standard, October 27, 2016, <https://www.business-
standard.com/article/companies/full-text-of-cyrus-mistry-s-letter-to-tata-sons-board-116102601571_1.html>
lx Press Release, A Statement from Tata Sons, November 10, 2016, <. https://www.tata.com/content/dam/tata/pdf/tata-sons-press-release-
101116.pdf>
lxi Ibid.
lxii Ibid.
lxiii Press Release, A Statement from Tata Sons, November 10, 2016, <. https://www.tata.com/content/dam/tata/pdf/tata-sons-press-release-
101116.pdf>
lxiv
Ibid.
lxv Ibid.
lxvi Deepali Gupta, p 85.
lxvii “Independent directors of Indian Hotels express confidence in Mistry”, Hindustan Times, November 4, 2016,
<https://www.hindustantimes.com/business-news/independent-directors-of-tata-group-s-indian-hotels-express-confidence-in-chairman-
mistry/story-EDRVPDN98U70tuhWYgCk1L.html>
lxviii “Tata seeks support for Mistry removal”, The Telegraph, December 8, 2016, < https://www.telegraphindia.com/business/tata-seeks-
support-for-mistry-removal/cid/1460138>
lxix Tata power Company Limited, Notice, November 29, 2016.
lxx “Cyrus Mistry removed as director of TCS with 93.11 % shareholders voting for his ouster”, The Economic Times, December 14, 2016
<https://economictimes.indiatimes.com/news/company/corporate-trends/cyrus-mistry-voted-out-from-the-tcs-
board/articleshow/55956701.cms?from=mdr>
lxxi ‘Tata boss: ‘I need to stop the bleeding’’, Financial Times, February 18, 2017, < https://www.ft.com/content/b2c39d0c-1194-11e8-940e-
08320fc2a277>.
lxxii ‘NCLT approves Tata Teleservices’ merger with Bharti Airtel’, The Banking Finance, January 22, 2019, https://bfsi.eletsonline.com/nclt-
approves-tata-teleservices-merger-with-bharti-airtel/
lxxiii
‘Tata Steel, ThyssenKrupp merger would have spiked steel prices: EU’ The Economic Times, July 13, 2019,
https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/tata-steel-thyssenkrupp-merger-would-have-spiked-steel-prices-
eu/articleshow/69773017.cms?from=mdr
lxxiv “N Chandrasekaran Full Interview | Tata Sons Chairman | CNBC TV18 Exclusive”, October 9, 2017, <https://www.youtube.com/watch?v=z-
sEJOhZl6c>
lxxv
Ibid.
lxxvi ‘Don’t want to criticize past decisions..Will take tough calls: N Chandrasekaran, Chairman, Tata Sons, The Economic Times, October 14, 2017,
https://economictimes.indiatimes.com/opinion/interviews/dont-want-to-criticise-past-decisions-will-take-tough-calls-n-chandrasekaran-
chairman-tata-sons/articleshow/60998694.cms?from=mdr
lxxvii ‘Focus on 3S to excel: Tata Sons chief’, The Hindu, December 26, 2017, https://www.thehindu.com/business/focus-on-3s-to-excel-tata-sons-
chief/article22282261.ece
lxxviii Ibid.
lxxix ‘Don’t want to criticize past decisions..Will take tough calls: N Chandrasekaran, Chairman, Tata Sons, The Economic Times, October 14, 2017,
https://economictimes.indiatimes.com/opinion/interviews/dont-want-to-criticise-past-decisions-will-take-tough-calls-n-chandrasekaran-
chairman-tata-sons/articleshow/60998694.cms?from=mdr
Page 21 of 22
2022.
lxxx ‘Tata Sons begins group revamp to simplify shareholding’, The Hindu BusinessLine, June 18, 2018,
https://www.thehindubusinessline.com/companies/tata-sons-begins-group-revamp-to-simplify-shareholding/article9729935.ece
lxxxi ‘One entity to cover Tata’s defense, aerospace operations’, The Economic Times, April 12, 2018,
https://economictimes.indiatimes.com/news/defence/tata-sons-to-consolidate-aerospace-defence-
businesses/articleshow/63717217.cms?from=mdr
lxxxii
‘Tata Chemicals & Tata Global Beverages to merge consumer business’, The Economic Times, May 15, 2019,
https://economictimes.indiatimes.com/markets/stocks/news/tata-chemicals-tata-global-beverages-to-merge-consumer-
business/articleshow/69342736.cms?from=mdr
lxxxiii
‘N Chandrasekaran to merge Tata’s housing, realty firms in three months, Business Standard, February 20, 2018, https://www.business-
standard.com/article/companies/n-chandrasekaran-to-merge-tata-s-housing-realty-firms-in-three-months-118022001154_1.html
lxxxiv ‘Tata Sons has strong cash flow, now our goal is to fund growth: N Chandrasekaran’ The Economic Times, August 21, 2019,
https://economictimes.indiatimes.com/news/company/corporate-trends/tata-sons-has-strong-cash-flows-now-our-goal-is-to-fund-growth-n-
chandrasekaran/articleshow/70763054.cms?from=mdr
lxxxv ‘Indian tycoon Ratan Tata is open to upheaval’, Nikkei Asian Review, November 16, 2017, https://asia.nikkei.com/Business/Indian-tycoon-
Ratan-Tata-is-open-to-upheaval
lxxxvi ‘Ratan Tata: New group chief taking more action than ousted Mistry’, Nikkei Asian Review, November 7, 2017,
https://asia.nikkei.com/Spotlight/Global-Management-Forum-2017/Ratan-Tata-more-action-taken-by-new-CEO-than-ousted-Mistry2
lxxxvii “Cyrus Mistry's Key Aide Nirmalya Kumar Opens Up On Sacking”, ET Now, October 30, 2017,
lxxxviii
Ibid.
lxxxix Ibid.
(All references were last accessed on June 24, 2020, unless mentioned otherwise.)
Page 22 of 22
2022.

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IMB 899

THE HOUSE OF TATA:

J. RAMACHANDRAN, SAVITHRAN RAMESH, AND K.S. MANIKANDAN

THE TATA GROUP: EARLY HISTORY

JRD’s outlook of business mirrored that of his predecessors. He said:

RATAN TATA YEARS3

Building Group Cohesion

RNT defended the move:

Driving Excellence and Growth

CYRUS MISTRY YEARS13

THE OCTOBER SHOCK

Ouster from the Boards of Group Companies

Asked about his plans for Nano, Chandra said:

(In ₹ billion)+ Total Income Debt PBDITA

(In ₹ billion) PAT Market Capitalization*

Tata Power 0.3 (9) 6 24 5 261 226 152

Tata Chemicals 0.6 10 9 12 29 89 147 169

Voltas 0.1 1 3 5 4 35 130 218

Source: CMIE Prowess

Year Tata Company Acquired Company Country Stake Value

Source: Tata website; Author research; not exhaustive

Source: Author research; Not exhaustive

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