00:09India's storied corporate behemoths, the Tata Group, is battling a wrenching boardroom revolt
00:16and succession battle over whether Natarajan Chandrasekharan should continue as its chairman
00:21in his third term, or as demanded by Noel Tata, the sign of the Tata family controlling a majority
00:28stake that he stepped down. At the superficial level, it seems like a clash between two giant
00:35egos, but in reality, the upheaval which has India riveted takes in its sweep a complex set of
00:42corporate and regulatory and to some extent even political forces. The group with a market cap of
00:49close to $300 billion and the latest revenue of $185 billion has witnessed stock market losses
00:57because of the boardroom fight to the tune of about $4 billion. To unpack the complicated
01:04goings-on, MCR spoke to Narayanan Madhavan, a well-known journalist, columnist, and editor
01:10who has tracked the conglomerate originally founded in 1868 since the 1990s. Narayanan Madhavan.
01:21Welcome to MCR, Narayanan Madhavan. It's a great pleasure to have you.
01:26Thanks for having me, Mayank. It's good to connect and discuss things other than music
01:32on which we dwell too much.
01:34We shall do it separately, yes.
01:36Or maybe we'll find songs to connect with on this theme.
01:42I'm absolutely open to it. In fact, that's a great passion of yours and mine, so we'll do it definitely.
01:49So let me start with a broad overarching question beyond the intricate corporate skill degrees.
01:56Has this succession upheaval or boardroom revolt, as it were, significantly damaged the much-storied Tata governance reputation?
02:07I think the simple answer to that is a big yes, Mayank. I did not think that there would come
02:15a day when I see this and say this.
02:17Because let me take you back, because I've had my own peculiar brush with the Tata's long before the current
02:26tussle.
02:27In the early 1990s, I was working for the Business Standard, and Business Standard was the one which broke the
02:34story
02:35that Ratan Tata would succeed JRD Tata. It was a much-denied story.
02:44And I think the Bombay bureau chief then was R. K. Murti, who was...
02:48And, you know, it was considered sacrilege to break a story on Tata's and Tata's would deny it.
02:55You know, I must also remember my editor C. P. Kuruvilla, you know, we all stood by the story.
03:02So when the actual Ratan Tata appointment was announced, Business Standard went to town and said, look, we were right.
03:11But those were the times when Tata's were considered even more sacred than the government, you know.
03:19So if the Tata's deny your story, you had a problem.
03:23But then just a year later, you know, soon after I joined Reuters, I had the interesting privilege of being
03:29the judge on Aap Ki Adalat,
03:32which was a popular program on ZE News, and I had to judge none other than Rusi Modi,
03:38who had just been ousted from the Tata Steel Board or managing directorship by Ratan Tata.
03:45Ratan Tata's famous purge, you know, it reminds you of how when Khrushchev came, Stalin came and purged...
03:56Stalin's men were purged.
03:59So except that this was a positive purge, meaning the folklore goes that Ratan Tata had the blessings of JRD
04:07Tata
04:07to oust the very people that JRD Tata had brought in because they were called the satraps.
04:13You know, it was a popular expression in business journalism those days where these people, like Darbari of Tata Chemicals,
04:23or Rusi Modi of Tata Steel, or Ajit Kherkar of Tata's hotel group, Indian hotels, were considered satraps
04:31because a lot of autonomy was given to them.
04:34But the companies were going down and Ratan Tata was readying the Tata group for globalization and liberalization
04:43because he was appointed to the post just a year after Dr. Manmohan Singh began his economic reforms.
04:51So these were momentous times.
04:53So conflicts are not new to Tata's.
04:55But when Ratan Tata did this, it was considered as a way to salvage the Tata's from a slothful past
05:05that it had slunk into
05:07and get it ready for a new, new world.
05:10And everything from the launch of Tata Nano, which didn't succeed, of course, but Tata Indica did succeed.
05:18My first car, incidentally, was Tata Indica, and my old middle class values suited everything about that car.
05:27And I was also, because you're a proud Indian and you want to buy a car completely made in India,
05:33because earlier cars, including the Ambassador, was actually a remake of the Morris Minor.
05:39So there's a lot of sentiment attached to the Tata's.
05:41So, but conflicts are not new.
05:47So that was essentially a different kind of a conflict, seen in a positive light.
05:52But right now, Tata seems to be bleeding.
05:55And this is where I think the Tata reputation, as you could see,
05:59in the fall on the day after last week's conflict between Noel Tata and N. Chandrasekharan
06:05or the Tata's board happened, Tata companies which were listed on the stock exchanges lost 40,000 crore in market
06:14value.
06:15So that is like I said back to BJP in Uttar Pradesh.
06:23So, you know, to draw an analogy between politics and business.
06:28So, so my, this is the time for me to quote Sahir Ludhianui, right?
06:36Please.
06:36And he said, yeh kahan a gaye ham yumi saath saath chalte chalte.
06:41It wasn't Sahir.
06:42It was Javed Akhtar.
06:45Javed Akhtar.
06:46You know, yeh kahan a gaye yumi saath saath chalte.
06:50So this is what happened to the Tata's.
06:56You know, from some 12,000 kilometers where I am, it seems to me like, and pardon me for being
07:06simplistic,
07:07a giant clash between two giant egos, that of Natrad and Chandrasekharan and Noel Tatars.
07:13Who has the upper hand at this stage considering how complex this web of companies?
07:19You are looking at 30 companies in 100 countries.
07:23Who has the upper hand now as we speak?
07:28I think if you were to go strictly by the letter of the nation's law, I think Noel Tata has
07:35the upper hand.
07:36I mean, Chief Justice of India, retired YV Chandrasekharan has backed him and he has Abhishek Manu Sanghvi as his
07:42lawyer.
07:43But that is a very technical interpretation of the law because ultimately majority stakes should prevail and which is common
07:51sense as well as corporate law.
07:53But where this whole thing comes into play, let me have a bit of fun, Mayang.
08:01I was just saying, you know, fight between half-brothers is not new to India.
08:05We had, you know, we had Kayakai who managed to almost rest the kingdom of Ayodhya out of Lord Rama's
08:18hands because Dashrath had made a promise, right?
08:22To her at a moment.
08:24So I'm using that as an analogy because the articles of association of Tata's sons is like Dashrath's promise to
08:33Kayakai.
08:34And then so Noel Tata is after all Ratan Tata's half-brother, just like Lord Rama's half-brother was Bharat.
08:45But Bharat was a nice guy.
08:46But in this case, I'm not too sure.
08:51There are people, my friends, who are astute observers, who have held very important positions in the business press,
08:57begin to think of it as a fight between half-brothers whose mothers couldn't get along or something like that.
09:03So to that extent, the Ramayana angle comes into business also.
09:10So to that extent, so but I think the articles of association are like Dashrath's promise.
09:17So although the rightful kingdom belong to Rama, in a weak moment, you have the articles of association for whatever
09:26reason.
09:27I mean, it's a bit bizarre if you ask me because it's like a tail wagging the dog.
09:31But that's the nature of the philosophy of philanthropy being married to hard business in very challenging times.
09:39And that's what I said in another podcast the other day, thoughts may be noble.
09:44But what we are not sure of is whether these ideas are being used to essentially defend one's turf or
09:54strengthen one's own position in a power struggle.
09:58And I apply it equally to Noel Tata and Chandra Shekharan.
10:02The most bizarre, very un-Tata thing.
10:07You know, let me invoke another famous Parsi, Dadabai Naraji, who went to the House of Commons and his famous
10:16speech against British Raj said, this is un-British rule.
10:21Okay.
10:22So, and Chandra Shekharan resigning a month ago, saying that – or not resigning, but effectively saying he's not available
10:30for reappointment on the grounds that there was no unanimity in the board, comes back to a scenario of reappointment
10:41where there is much more than a lack of unanimity, there is acrimony.
10:47So, this is a very un-Tata thing to do for a group known for sophistication.
10:52And, you know, we used to joke in our college days, you know, you had to get into Tata administrative
10:58service, you should know how to hold a fork because you had to deal with foreign collaborators.
11:03So, it had this very la-di-da, you know.
11:07Indeed.
11:08Even Noel Tata's mother, you know, who founded Lakme, you know, it's a… you know, Lakme is based on Lakshmi.
11:19Right.
11:19So, you have this kind of nice la-di-da history, sophistication and nice behavior.
11:27And it was very interesting and moving recently to see this wonderful TV serial… sorry, web series called Made in
11:34India on the Titan brand.
11:36Yes.
11:37Which showed Nasiruddin Shah playing J.R.D. Tata.
11:41So, you could see that there was so much of sophistication and gentleness in that group.
11:47All that seems to have… well, they seem to have said Tata to it.
11:53You know, it's interesting you should mention sophistication.
11:56My office in Bombay when I began in the Free Press Journal in 81 was literally walking distance from the
12:03Bombay house.
12:04And I used to frequently drop by to talk to a few friends and you could feel it in the
12:08air.
12:09Interesting you mentioned that.
12:10That they would look at you strangely and here comes a 20-something journalist who is not even wearing a
12:15suit.
12:16Why is he here? That kind of… you get that sense.
12:18Yeah, yeah, yeah. You know, yeah, yeah. So much so that I have fond memories because I started my career
12:23in Dada Bainology Road in India.
12:27Oh, I see.
12:27In fact, I started working on a financial novel which I never got to third chapter but it was… I
12:35said that building up of the protagonist in Free Press Journal Mark.
12:42So, we are pretty close in terms of that origin. We started our careers not far from Bombay house.
12:48Absolutely.
12:48And the Reserve Bank of India. And it's interesting you mentioned that because the Reserve Bank of India and Bombay
12:53house are now fighting a battle over the listing of Tata sons.
12:57Yes.
12:57And the Reserve Bank regulations require Tata sons to require and that is the first trigger in this battle.
13:05Right.
13:05Now, we don't know. Back to your first question. You know, it's not simply Noel Tata versus N. Chandrasekharan as
13:14it is being made. Back to the Mahabharata.
13:17Yeah, absolutely. There are too many things, too many undercurrents here. You know, the fact that the Tata story has
13:23been in the heart of India for a century and a half, to be precise, 158 years now.
13:29Yeah.
13:30And the fact that the company, in a sense, embodies national pride unlike perhaps any so far. What does this
13:37crisis do to its long-term future?
13:40I think one way, like they always say, is to turn the crisis into an opportunity. Okay? I was just
13:48thinking this morning, you know, you can look at, because we love cinema and literature, you know, you can look
13:57at everything from a literary cinematic point of view.
14:02Now, I can look at this from Chandra's point of view, that he's being loyal to Ratan Tata or his
14:08ghost, the way Karna was to Duryodhana in the Ramayana.
14:11Right. Or you could see him as a Lakshman playing to Lord Rama, you know. But you could look at
14:19things from Noel Tata's point of view.
14:21Nobody in the history of the Tatas has faced this bizarre situation of forcing a listing of Tata sons. I
14:28mean, you assume Tata sons lauded over this big empire and they had their own cash.
14:35They had their own, they minded their own business and rather very well, thank you very much.
14:40So that is the question of why would suddenly Noel Tata face such a bizarre regulatory requirement, bizarre for a
14:50lot of people.
14:53You can always take a more public policy oriented things, which I did the other day as a sympathetic way
14:59of looking at the RBI, RBI's point of view, you know, concentration of power, lack of accountability.
15:04Then you can look at it from the point of Shapurji-Palunji mystery and say, look, I'm stuck with an
15:1018% minority stake. What happens to me, you know?
15:13You know, I was just joking, you know, that Shapurji-Palunji mystery is stuck with what is called the Hotel
15:20California Syndrome.
15:21You know, you can check out anytime you like, but he can't easily leave Tata sons.
15:25So, you know, so back to our, you know, so the question is, with all apologies to Hotel California, why
15:36should Shapurji-Palunji face the music?
15:41So he's striking, as it were, the wrong course in this game.
15:45Indeed.
15:45So, so, so, so we have to rely on, you know, hopefully that the ghost of J.R.D. Tata,
15:56who used to love Western classical music, will turn it into a certain harmony.
16:01But that would obviously mean hard choice on two fronts.
16:08I'm trying to be a bit having fun and being very seriously analytical at the same time.
16:13You know, the question is, how do you set Tata's son's house in order?
16:18Point number one, you should know how to deal with Shapurji-Palunji mystery.
16:22You know, let him have a divorce, corporate divorce, he wants.
16:27Point number two, what do you do with Air India?
16:30It's, it's bleeding.
16:32And you have other, some not-so-profitable or loss-making companies in the board.
16:37Can they do this to, as an opportunity to clean up the balance sheet?
16:42Third is to, of course, engage with RBI, because RBI, that's what Noel Tata wants.
16:48But can, can this be done to sort this out?
16:54But I wrote in an article last week, you know, you can't eat the cake and have it too.
16:59So basically, being a philanthropic organization and doing no-nonsense business
17:04and being accountable to shareholders as a matter of shareholder value,
17:08it's like trying to serve very difficult ends at the same time.
17:13Now, the articles of association of Tata's sons, the philosophy of Tata trusts,
17:20and the nuanced way in which Ratan Tata harmonizes.
17:29And hard, hard, there was a hard or has nots boardroom behavior.
17:36That is very Ratan Tata.
17:37You, you talk to the managers like an R.K. Krishna Kumar or who ran Indian hotels or, you know,
17:46there were others like a Narendra and then they will say, they will say, Ratan Tata is like God to
17:50them.
17:50But you talk to Cyrus Misri would have a different opinion because it could be,
17:55or you talk to Mamata Banerjee, who saw this famous confrontation in Singapore with Ratan Tata.
18:00So Ratan Tata had that unique personality where he could take on both sides.
18:07But this is not happening right now.
18:09Noel Tata, who, you know, although he made, you know, Trent a big retail company
18:16and has the unique charm of being the son of the woman who brought Lakme,
18:22but he needs to do more than cosmetic change in Tata.
18:28So that's something that he has to grapple with.
18:31So, but this could be an opportunity for them to actually make hard choices.
18:35You know, I will… my basic line is that you can have an arm's length relationship between philanthropy and business
18:41by respecting both for what it is.
18:44Right.
18:44You know, I think to some extent Narayan Murthy does that.
18:47You have the InfoSys Foundation and then you have InfoSys as a company which believes in business strategy.
18:52He is also very sentimental, you know.
18:55Narayan Murthy sees InfoSys as an institution, not as a company.
18:59Right. Right.
19:01You know, you mentioned…
19:02And the institution is where, you know…
19:04Yeah.
19:04Yeah.
19:05Go on.
19:05You mentioned Shapurji Polanyi.
19:07It's an interesting…
19:09I was, in fact, coming to that.
19:11The fact that their stake is worth perhaps about between $27 to $35 billion at 18.73.
19:19That's a pretty large amount.
19:21But apparently I read that they've shot off letters to the prime minister and others about their plight.
19:28Now, does that open the Tatas to sort of political meddling by the Modi government?
19:34Because it is a company of great consequence.
19:37You're looking at, what, about $277 billion in market capitalization or something…
19:44Yeah, exactly.
19:45No.
19:45In fact, I was alluding to that.
19:49In fact, yesterday I put out a post on X saying that, you know, Noel Tata may have his majority
19:55in 66% through Tata trusts.
19:57Right.
19:57But there is such a thing called the rights of a minority shareholder in corporate law.
20:04And the least it requires…
20:06In fact, today there is news out on that.
20:08There are attempts to sell little chunks of the Shapurji-Pelenji mystery stakes.
20:17So I was just joking, you know, you could sell it to a Blackstone from the US.
20:22You could sell it to the Abu Dhabi.
20:24You know, you have to look at people with tons of money to buy that kind of a stake.
20:29And the kind of combination of ambition and prestige and big ticket purchase to get this in order.
20:35So I was mentioning that likely suitors would include the Abu Dhabi Investment Authority or Blackstone or Soft Bank of
20:45Japan and the Adani Group.
20:48So I was just joking.
20:49But, you know, conspiracy theory is very fond of floating around in Delhi.
20:58And right now people wonder whether there is some… a certain political economy angle to this whole thing.
21:04So I will not speculate too much.
21:07But as a lover of both historical novels and financial, you know, intricacies in which I have seen some famous
21:18companies change hands from Britannia in the 90s when I was a close witness to some of the things that
21:25were happening.
21:28Rajan Pillai was ousted.
21:29So things happen in corporate, you know, circles.
21:35So I don't want to go too much in there.
21:38But yes, this is becoming a perfect storm of a situation.
21:41Something like a Mahabharata where which side you brought back depends on who either pays you, who you are loyal
21:50to or how you see things.
21:52And yesterday, you know, Abhishek Manu Singhvi is a lawyer for Tata Trust.
21:58It was interesting to see him on TV, profusely apologetic almost about representing one rather than the other in this
22:09whole game.
22:10So you could see him like, you know, a Bhishma or a Dronacharya kind of a situation where, you know,
22:20there is Arjun and Trishan on the other side.
22:22So there is the land of Mahabharata.
22:23It's a very epic sort of a conflict where other people join in.
22:27Today, Sharad Pawar has thrown his weight behind the Tata Trusts.
22:33Right.
22:33Which is very, very interesting.
22:36So, because if he sticks his neck out, it basically means something very, very interesting.
22:47Because he has his own way of looking at things and he would never, you know, he is... I don't
22:52know who he is, but he would always, you know, you could call him the...
22:57Depending on who you are, you could call him a Vidura or a Shakuni in this whole game.
23:01So, you know, I mean, I come from the land of the Mahabharata, which basically means this is how...
23:08For me, this is Hindutva, to have a deep understanding of not... For me, Hindutva is not being parochial.
23:17Right.
23:18It's being understanding things from a meta level.
23:21So this is what we are trying to do as we speak.
23:23Yeah.
23:24In the interest of time, I'll wrap it up with the last one.
23:29Just a quick one.
23:29Do you foresee a long drawn out legal battle or you think the resolution could be quicker than what people
23:36expect?
23:38Well, let's call... I would call it a war and not a battle.
23:43So let's be very clear there.
23:44A war has more than one battle.
23:48So the first battle would be about the Articles of Association versus the 66% state.
23:59And this bizarre situation of, you know, let me quote that Ghazal.
24:05Since we are on to music, you know.
24:07Farida Khanum's Ghazal,
24:15So this is what Chandashree Karan has done.
24:17He has resigned and yet not resigned.
24:20Absolutely.
24:20And therefore the courts will have to first decide its locus standi.
24:30Should I start singing Mamma Mia?
24:33Here he goes again.
24:36That 66% state rules over Articles of Association.
24:40Because it's the majority that creates the articles.
24:44Right.
24:45But the articles also...
24:50But there are minority rights.
24:52So there are some things to be...
24:53So that takes us to another chapter.
24:56What happens to SP group?
24:57Then there is the RBI chapter on what happens to RBI and the regulation.
25:01And what happens to the talk of listing?
25:06Was the listing just a way of knocking one ball on the snooker table so that others get knocked about?
25:15So we will watch this space.
25:17There's plenty for us to chew over, Mayank.
25:19Neither of us is an interesting party from what I know.
