Unfolding Episodes of the Tata Opera

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The removal of Cyrus Pallonji Mistry the head of the Tata conglomerate is news beyond boundaries.

Business, however, in India has taken a fresh turn with this kind of move. Let us get some fundamentals right. There is no such thing as the Tata family, anymore, in the conventional terms of Indian business.

This is not the best place to get into the pedigree and family tree analysis. However the first significant break in the family tree continuum took place with the succession of Ratan Tata to the Chairmanship of the Tata Sons board. JRD did not have a biological successor. Ratan Tata himself never married. This therefore was itself a significant departure in the succession pattern of family businesses.

Consider the major family houses in India and without naming the significant ones the succession has almost always been by blood groups of biological descent, following the law of primogenitor. Sitting on the board of a major business family which had been successful for over 70 years when I raised the issue of investment and diversification the octogenarian Chairman and the head of the group had no hesitation in putting his foot down. His argument : “We do not have any adult male ready and available in the family to lead such a new enterprise”. The approach was simple and disarming. It was symbolic of a fairly representative mindset.

Often Indian businesses have spawned new units to give employment to adult males of the dominant family. In case of a untimely demise of an adult male the succession has gone to the wife if the next generation was not yet old enough to hold the ropes.
This pattern of running business, cuts across all religious effluence and touches Hindus, Christians, Muslims, Sikhs and the list can go on. The stamp of so called Indian culture is large. It would be  dangerous and controversial to offer an opinion. However, business has a knack of taking its own direction, very much in the same manner as water flow takes its own course.
Consider the case of the Tata Sons Ltd. It is no secret that the related family members of the Tata stock have control of the Tata Trusts. Tata Trusts in turn controls over 60% of investment in TATA Sons. The power equation is clear.

Obviously the modernized educated commentator would see this in his framework of reference.

He would talk of ‘shareholders’ and ‘the board’. He will talk of the investors and the executive control. The basic reality however, is one of, a family group confronted with power in the hands of a non-family group. The key players of Tata Sons were the confidantes of the Chairman and not necessarily in a kinship relationship. This must be a very unusual situation to the kind of networks systems which operated the group of Tata Trusts. It’s a tell tale situation.

There are other unique elements

Quite rightly beginning with Jamsetji the group acquired a halo of high ethical values and strong espousal of the national cause. The Tata tile story rolled on for a 100 years till they found a person in the extended family networks based on marriages, with Irish citizenship to head Tata sons. Getting the Indian citizenship required one year of uninterrupted residency in India. This would be clearly impossible for any individual in that segment of elite and ruling class.
The rest is history. There are other elements   Tata’s conglomerate. In the last few decades some sordid truths started surfacing and one could with reasonable truth argue that Tata sons ltd had all the weapons in its arsenal of business which any business group in India had. This included liaison with the lobbyists and  land acquisition which the courts find unacceptable.

Clearly these cannot be the reason for the sacking of Cyrus. Theses can’t be the reason for the return of Ratan. The story is  unfolding .there is desperate attempts by some to give a modern spin to explain the business twists of a very conventional and average frame of reference.

The episodes are inconclusive. The story line will be taking its own course.

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