I first met Ratan Tata within the early Nineteen Nineties, some years after he had taken over the chairmanship of Tata Sons from JRD Tata. On the time, most of the Tata corporations have been run like satrapies: Russi Mody managed the Tata Iron and Metal Firm (TISCO), Darbari Seth ran Tata Chemical compounds and Ajit Kerkar ran the lodges enterprise. As JRD’s favourites, they ran their empires as they felt, and believed that that they had the higher hand over the greenhorn head of Tata Sons. How improper they have been.
After a bruising battle, the seemingly mild Ratan removed the hardest and longest-standing satrap, Russi Mody, in March 1993 by invoking the group’s forgotten retirement coverage — administrators older than 75 years needed to go. Darbari Seth acquired the message and left, although he left his son Manu to succeed at Tata Chemical compounds. Kerkar was an altogether completely different story. He was a lot youthful, so the retirement coverage wouldn’t do. Furthermore, Kerkar had created some 20-plus top-class lodges with little to no monetary assist from the Tata group and was hardly beholden to Ratan. I do not forget that battle effectively as I witnessed first-hand Ratan’s metal and tactical intelligence. Because the chairman of Indian Inns Firm Restricted (IHCL), he spoke with the important thing administrators one-on-one to assist his place. After which, at a board assembly of IHCL, the board ousted Kerkar as a substitute of permitting him to retire.
In his early years at Tata Sons, Ratan confronted a number of different issues. I keep in mind three. The primary was his need to start out an airline with Singapore Airways. This was repeatedly blocked by Naresh Goyal of Jet Airways, who knew woo New Delhi’s ministers and bureaucrats much better than Ratan and compelled the Tatas to surrender. Vistara got here later. The second was a big “donation” that the Tata group gave to the United Liberation Entrance of Asom (ULFA), a militant organisation, presumably for the security of the managers and employees of the Tata Tea estates in Assam. That blew up in his face, and it took some time to go away. The third have been the administrators he inherited at Tata Sons. As soon as, he invited me to Bombay Home to offer them a chat on company governance. It was a post-lunch assembly and Ratan warned me that the majority administrators could be snoozing whereas I gave the discuss. They did, and I couldn’t work out how he might cope with these oldies. “It’ll take time, Omkar”, he mentioned, “and needs to be carried out separately”. Which he ultimately did.
Essentially the most essential challenge that confronted Ratan was how little Tata Sons owned of the businesses that carried the Tata identify. Not often was the stake increased than 20 per cent. Right here, Ratan was lucky to have his money cow, the but unlisted and extremely worthwhile Tata Consultancy Companies (TCS). Through the years, he used the free money movement from TCS to hike Tata Sons’ shareholdings in all the important thing corporations and thereby defend them towards takeovers. It was solely after this was achieved that TCS acquired listed in August 2004.
Amidst all this, Ratan triggered a collection of world acquisitions. It began with Tata Tea taking up Tetley within the UK in 2000. In between a number of different worldwide buys, got here two monstrous ones: Tata Metal’s takeover of the Anglo-Dutch steel-maker, Corus, in 2007 for £6.2 billion; and Tata Motors’ buy of Jaguar-Land Rover for $2.3 billion in 2008. Costly to start with and made worse by a brutal public sale, the Corus acquisition turned bitter — an aspirational mistake that might not be dealt with. In distinction, Jaguar-Land Rover was, and continues to be a significant success.
Now, for the human points of Ratan. Let me share 4. The primary was when Pakistani terrorists attacked the Taj Mahal Resort in Mumbai on November 26, 2008. The entire world noticed Ratan standing in entrance of the lodge till the final survivor was taken out. He then ensured that the relations of the killed staff acquired salaries that they might have earned for the remainder of their working lives; and visited their properties to make sure that their households have been taken care of.
The second was his childlike love of planes and flying. I keep in mind escorting Jaswant Singh to his workplace the place, in the middle of dialog, he found that Singh was flying again to Delhi the following day. So was Ratan; and he invited each Jaswant and I to accompany him on the aircraft. He took management at Santa Cruz airport and flew continuous to Palam with Jaswant within the cockpit. As soon as, whereas awaiting a flight from Pune, he witnessed quite a lot of Sukhoi jets take off and contact down. I then acquired a superb tutorial from Ratan about Sukhois, their thrust, their velocity, their quick take-off functionality and way more. His dream of flying a jet fighter got here true when he was handed over the controls of an F-16 at Bengaluru and he did some rolls and got here right down to 500 ft. The happiness on his face was past comparability.
The third was his simplicity. Till he grew to become too previous, Ratan would all the time drive his automotive within the night and not using a chauffeur. He would carry his personal baggage. I by no means noticed flunkeys round him at airports. He would wait his flip to test in and undergo the safety test. I’ve seen him wheel a baggage cart at Heathrow Airport. He lived and quietly entertained in his condominium in Colaba, in contrast to others who constructed multi-storied palaces and palazzos in Mumbai.
And the fourth was his love for canines. Whereas he all the time had a brace of Alsatians at residence, his love for all method of stray canines was second to none. Consequently, you entered Bombay Home being greeted by quite a lot of stray canines who loved the cool marble flooring in summer time. They have been the lords of that workplace.
Ratan, we have been blessed by a uncommon particular person corresponding to you.
The author is an economist, Chairman of CERG Advisory Non-public Restricted, and serves on boards of listed corporations
