Tata Sons, the holding company of the $71-billion Tata Group, today announced the members of the committee which will choose a successor to Chairman Ratan Tata.
The five-member selection panel, which is expected to decide on the next occupant of the corner office in Bombay House, Tata Sons’ headquarters in Mumbai, by March next year, will include former Vice-Chairman N A Soonawala and Non-Executive Director R K Krishna Kumar. Both have been Ratan Tata’s trusted lieutenants for years.
The other members are Cyrus Mistry, the younger son of construction tycoon Pallonji Mistry, the single largest shareholder of Tata Sons with 18 per cent stake, Shirin Bharucha, a lawyer who has worked with the Tata Group since the 1960s, and British businessman Lord Bhattacharyya, the only external member of the panel.
Bhattacharyya, whose actual name is Sushanta, is the founder of Warwick Manufacturing Group, an industrial consultancy and part of Warwick University. He is a long-time friend of Tata’s.
Tata is due to retire in December 2012, by which time he will have completed two decades at the helm of the group. His successor will work with him for seven to eight months before taking charge.
For years, one of the biggest guessing games in Indian corporate circles has been who will take over the Tata Group when Tata retires. Tata has been tight-lipped on the issue so far and has only said that the candidate could come from inside the group or outside, so long as he upheld its tradition of corporate social responsibility. “The person must maintain our values, because they are, in a manner of speaking, the DNA of the group — the crown jewel," Tata said recently.
| THE FAMOUS FIVE |
He is a director on the Tata Sons Board, chairman of Tata Coffee and Asian Coffee, and vice-chairman of Tata Tea and of Indian Hotels. He is a director in several other enterprises |
The number two in the Tata Sons board till his retirement, Soonawala is one of the most trusted lieutenants of Ratan Tata. He is a member and trustee of several trusts. |
He is the founder of the Warwick Manufacturing Group, an industrial consultancy and part of Warwick University. A close friend of Ratan Tata’s for years, BhattacharyYa has been instrumental in the group’s expansion in the UK |
Her association with the group dates back to the 1960s. She has advised about 80 companies of the group. Bharucha is also involved with a number of trusts, including Sir Ratan Tata Trust |
He is the younger son of construction tycoon Pallonji Mistry, the single largest shareholder in Tata Sons. Apart from being one of the youngest directors on the board, Mistry heads the family's flagship business, Shapoorji Pallonji & Co, as managing director |
Observers point out that the Tatas are perhaps the only big Indian group where a formal process exists across levels for succession.
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Besides Noel Tata, who is the son-in-law of Pallonji Mistry and half-brother to Ratan Tata, there are several other names in the realm of speculation to take over the top job.
Tata, 72, a Cornell University-trained architect, faced the challenge of improving the efficiency of group companies after becoming chairman in 1991. He brought younger and professional managers. He introduced retirement age for heads of companies as part of a process to see off well-entrenched old-timers such as Russi Modi at Tata Steel, Darbari Seth at Tata Chemicals, A H Tobaccowala at Voltas and Ajit Kerkar at Indian Hotels.
In the late 1990s, some of the Tata companies grappled with low profitability and raised several questions about the group. Tata can be credited with turning them around and the subsequent acquisition drive by the group.
Tata Tea notched the first notable overseas acquisition by Indian companies when it acquired Tetley. Tata Steel went on to buy European steelmaker Corus to become the world’s sixth largest in the business. Tata Motors purchased prestigious UK brands Jaguar and Land Rover. Indian Hotels has grown overseas acquiring hotels in the US and other places.
| RATAN TATA'S GUIDES |
Sushanta Kumar Bhattacharyya, known as Lord Bhattacharyya, is an India-born British engineer, educator and government advisor. Bhattacharyya, 70, was born in Dhaka and his father was a Professor of Chemistry at the Indian Institute of Technology, Kharagpur. He studied at the Indian Institute of Technology, Kharagpur, and the University of Birmingham, where he did his MSc in Engineering Production and Management and PhD in Engineering Production. Lord Bhattacharyya is the director and founder of WMG (formerly Warwick Manufacturing Group), an academic multi-disciplinary unit at the University of Warwick. WMG was established in 1980 to help the UK manufacturing industries utilise cutting-edge university research and effective knowledge transfer. WMG employs more than 300 full-time staff and 150 associates. Lord Bhattacharyya is also advisor to many companies, governments and organisations around the world, and has published extensively in the field of manufacturing. Bhattacharyya, a past member of the UK Council for Science and Technology, advises the South African government on science and technology policy. He was appointed Commander of the Order of the British Empire (CBE) in 1997 and knighted in 2003. In January 2002, he was awarded the Padma Bhushan by the President of India. |
In August 2006, Cyrus Mistry was appointed as a director on the Board of Tata Sons. At 38, he was one of the youngest directors on the board of the Tata Group’s holding company. He is the younger son of construction tycoon Pallonji Mistry and heads his family’s flagship business, Shapoorji Pallonji & Co, as managing director. Cyrus Mistry filled the position vacated by his father, who retired after turning 76. The Mistry family continues to hold a 18 per cent stake in Tata Sons. The 18 per cent stake in Tata Sons was first bought by Cyrus Mistry’s grandfather Shapoorji Mistry. He bought 12.5 per cent from FE Dinshaw Estate some time in the 1930s. He later acquired more stake from other Tata family members, taking his holding to about 16.5 per cent. Later, Pallonji Mistry took over from his father in the 1970s and built on that holding. The families came closer when his daughter Aloo Mistry got married to Noel Tata, Ratan Tata’s step-brother. Today, Pallonji Mistry’s family is the biggest non-Tata shareholder in Tata Sons. In the 1990s, the family invested Rs 60 crore in Tata Sons’ rights issue to maintain the holding in the company. |
Shirin K Bharucha, a renowned lawyer, has worked for the Tata Group for many years. She is also involved with a number of trusts, including Sir Ratan Tata Trust, one of the main trusts run by the Tata Group. Bharucha is also involved with many organisations which worked for Mumbai’s urban renewal. She was part of the team that restored the Oval Maidan, the Horniman Circle Garden and the Kala Ghoda Art District. She is managing trustee at the Urban Design Research Institute (UDRI), which supports interaction among architects, urban designers and professionals in fields such as urban economics, sociology, planning, conservation and history. Bharucha has also worked as a scrutiniser of postal ballots in companies such as ACC. |
R K Krishna Kumar is a product of the elite Tata Administrative Services (TAS), which he joined in 1963 after graduating with a master’s degree from the University of Madras. He is the non-executive director and vice-chairman of Indian Hotels Company (IHCL), the country’s largest hotel chain, which owns the Taj brand of hotels. Krishna Kumar is also a director on the Tata Sons’ board, the chairman of Tata Coffee, Infiniti Retail, Tata Realty and Infrastructure, Tata Housing and Development Company, and the vice-chairman of Tata Global Beverages (formerly Tata Tea). He is a trustee of Sir Dorabji Tata Trust, Sir Ratan Tata Trust and some allied Tata trusts. He is a member of the governing council of Tata Institute of Fundamental Research (TIFR) and chairman of the governing board of Tata Institute of Social Science (TISS). Krishna Kumar was awarded Padma Shri in 2008 by the government. |
Noshir A Soonawala, a trusted lieutenant of Ratan Tata, was the vice-chairman of Tata Sons and chairman of Tata Investment Corporation, before he retired in March at the age of 75 from the Tata Group, after four decades with the group. He was also a director of Tata Industries, Tata Motors, Indian Hotels and Trent. He joined Tata Sons in 1968 as executive assistant to the finance director and eventually, became the finance director in 1982. Soonawala had been on the board of Tata Sons since May 1989. He started his career as a senior project officer (finance) with ICICI, where he worked for 10 years. Soonawala is a member and trustee of several trusts, such as Sir Ratan Tata Trust, Bai Hirabai JN Tata Navsari Charitable Institution, Navajbai Ratan Tata Trust, JRD Tata Trust, RD Tata Trust, Sir Dorabji Tata Trust, Jamsetji Tata Trust, Tatachem Golden Jubilee Foundation and Tavescor Charitable Trust. In 2000, he was appointed as the vice-chairman of Tata Sons – the first vice-chairman for the group. He worked closely with Ratan Tata and was a major guiding force for the financial operations of the Tata Group companies. Soonawala is a commerce graduate from the University of Bombay and a chartered accountant from the Institute of Chartered Accountants of India. |