Breakthrough on DoCoMo tops Tatas' to-do list

A solution is possible even before Chandrasekaran takes charge next month

After the biggest boardroom battle of these times, the Tata group seems to be getting back to business. The $103-billion conglomerate is working on at least five priority areas, from the leadership structure to resolving of pending business issues.

A breakthrough in the DoCoMo case is top, it is learnt. Sources indicate a resolution might be possible by the time N Chandrasekaran takes over as chairman of Tata Sons on February 21. Talks are on between the Indian and Japanese sides, says a source in the know.  

Japanese telecom group DoCoMo, which was in partnership with Tata Teleservices, had filed for international arbitration over non-compliance of a financial agreement, that came to test when the companies parted ways. Subsequently, DoCoMo won an award of $1.17 bn. While the Tatas have deposited Rs 8,000 crore with the registrar of the high court in Delhi (the next hearing is on February 2), they are citing Reserve Bank of India rules to argue they cannot pay the stated amount, though this was part of the exit clause in the agreement. 

Another important item for the Tatas is to revamp some of the company boards, where new directors are likely to be inducted. This is to ensure the group firms and holding company work in cohesion, rather than as independent entities, as demonstrated during some of the board meetings after Cyrus Mistry was ousted as Tata Sons chairman.

High on the list is to have Chandrasekaran, or Chandra as he’s popularly known, on at least nine boards of group entities. Work is on to have him as chairman of all these before he takes charge at Tata Sons. While he’s already been made chairman of Tata Motors, the others are Tata Consultancy Services, Indian Hotels, Tata Chemicals, Tata Steel, Tata Power, Tata Teleservices, Tata Global Beverages and Tata Industries. Mistry also chaired the boards of all these.

Getting a chief financial officer (CFO) for Tata Sons is also a priority. The group is likely to consider in-house talent. One of the stated concerns of Ratan Tata was that Mistry had failed to appoint a group CFO after Ishaat Hussain retired in 2012. It was years after his appointment that Mistry began the process of appointing one. Sources note that on October 24, 2016, appointment of a CFO was on the agenda of the Tata Sons board meeting. The same day, however, Mistry was ousted in a boardroom coup.

Fixing Chandra’s remuneration package could also figure in the top five things to do for the group in the next few weeks.  As TCS managing director and chief executive, his package was Rs 25.6 crore in 2015-16, comprising Rs 19 crore as commission, Rs 2.28 crore as salary, Rs 2.64 crore as perquisites and Rs 1.73 crore in other allowances. In FY15, he also got a one-time special bonus of Rs 10 crore. As TCS chief, his take-home pay was much higher than Mistry’s at Rs 16.25 crore last year.  

Besides, the Extraordinary General Meeting slated for February 6 to remove Mistry from the Tata Sons board is sure to keep the group engaged. A few days before that, on January 31, the National Company Law Tribunal could come out with a verdict on Mistry’s main petition against the Tatas.