IN AN aspirational and caste-ridden society, corporate India intrigues at the best of times. Perhaps it’s the lopsided wealth of its business titans who present as both hope and fantasy for the 50 per cent of India’s billion-plus population who somehow struggle by on 50¢ a day.
The lavish lifestyles of India’s billionaires – 69 of them by Forbes’ calculation, the world’s fourth-biggest national total – are covered by an obsessive and sycophantic media with the fawning attention that even embarrasses Bollywood superstars.
On any given day, there will be yet another photo spread featuring ”Antilla”, petrochemicals tycoon Mukesh Ambani’s extraordinary home, a 27-storey skyscraper in downtown Mumbai that cost him 5 per cent of his $40 billion fortune. The social page will feature another mega-party thrown by Vijay Mallya, the flashy aviation and formula one mogul whose Kingfisher beer seems to decorate the tables of near every curry house in the world. Flip to sport and chances Lalit Modi will be there, as well known on the subcontinent as Sachin Tendulkar, thanks to his cricket Premier League.
India’s super-rich are explored in minute detail and rarely critically, perhaps explaining why India regularly has such spectacular corporate scandals. Sometimes they even appear in the business pages.
But even by these standards, this year promises the gift of a business soap opera that will keep on giving for Indians – the question of who will take over the running of one of the world’s mightiest conglomerates, the 143-year-old Tata empire.
Along with the railways and cricket, Tata is regarded as one of the few institutions that genuinely unites India, a claim government cannot even make.
In Western business terms, it would be a relic; a sprawling conglomerate of almost 400,000 employees that reaches across 10 disparate business sectors, from hotels and IT to cars, telcos and tea, and most points in between. Tata men, and most of its senior executives, like to boast that Tata pays about 5 per cent of India’s tax take, its activities equal to about the same share of the economy.
Tata chairmen don’t change that often. Since 1868, when it was founded in then British Bombay, there’s been just five. All of them have been men and all members of India’s tiny but hugely influential Parsee community, with its origins of Zoroastrian emigration from Persian pogroms. Only one Tata chairman has been drawn from outside the Tata family, and he reigned for just five years in the 1930s.
By the comparative standards of remote and lofty office, there’s been 11 Catholic popes in that same period.
Many Indians would argue the passage of a Tata chairman is of greater import to India than a change of government. The present incumbent is the confirmed 73-year-old bachelor Ratan Tata, who has ruled since 1991, when he took over from his uncle J.R.D Tata, a distant cousin of group founder Jamsetji Tata. An architect by training, if never practised, he was then a controversial choice, seen as a nepotistic unknown in Indian commerce and a lightweight. The group’s various imperial viceroys, whose writ over their far-flung divisions was often more powerful than the Bombay-based chairman, rejoiced when he took over, seeing the new boss as clubbable and easily manipulated.
Not that Tata required much entrepreneurship. For much of J.R.D.’s term, which began before India became independent from London, Tata executives mostly only had to show up to work to make money. This was the era of the Soviet-inspired ”licence raj”, where the Nehruvian government and its successors handed virtually monopoly permission to manufacture products and provide services. Successful lobbying of bureaucrats saw Tata insert its fingers in many pies. With little or no competition there was little need to innovate. Tata grew fat but it also became indolent and bureaucratic, famous for its clubby cradle-to-grave sinecures.
By the early ’90s, the licence raj had faded away, hastened by the arrival of the reformist Rajiv Gandhi, with the present PM Manmohan Singh as his finance minister delivering the death blows.
For the Tatas, this liberalisation coincided with Ratan’s arrival as group chairman. For a while, powerful business groups like Tata resisted change, gathering together in virtual cartels, such as the informal ”Bombay Club” and cloaking themselves with nationalistic hubris. Tata ran itself like a toffy colonial club for much of the ’90s, and was soon overtaken by the parvenu Ambanis of Reliance Industries, horrifying the Tatas so used to being No.1.
But Ratan proved to be of sterner stuff. He sliced up powerful fiefs, took Tata into new areas such as IT – Tata Consultancy is one of the world’s leading ”business processing outsourcers”, providing tech back office for companies worldwide – and consumer vehicles, which have proved highly profitable.
He launched India’s first home-grown car and started aggressively buying overseas as India rose. In Europe, Tata owns Tetley Tea, the Jaguar luxury car marque and the Anglo-Dutch steel maker Corus. In Australia, Tata has made inroads in coal and renewable energies. On his rule, group profits have risen fourfold.
Unlike his flashy fellow moguls often mired in corruption, Ratan Tata presents as a modest cleanskin striding the world stage, a fashionable mainstay of forums like Davos and on myriad important boards. He has generally managed to avoid controversy and scandal, though he has been recently embarrassed by allegations over his role in a massive telecom spectrum scandal.
Tata also supplies the brutal Burmese junta and his Mumbai flagship hotel, the Taj Palace, was trashed by Pakistani militants in the 2008 terror attacks.
So who will take over this fascinating, complex conglomerate? The front runner appears to be yet another family member, Ratan’s 53-year-old French-Indian half-brother, Noel, recently appointed to run the group’s international trading group. Noel also has the good fortune to be married to the daughter of Parsee billionaire Pallonji Mistry, Tata’s biggest single shareholder.
Despite talk that it’s time for a non-Parsee, a non-Tata and even a non-Indian to run this talismanic giant – the headhunting is claimed to be global – chances are the Tatas will again find their man within, just as they have always done.