The government had performed such acts in the past. The most famous of them involved Rs. 38,500-crore Kolkata-headquartered multi-product FMCG giant ITC Limited, in which Batco of the UK, the minority promoter, held over 31 per cent stake, to protect the professional management against the British firm’s bid to remove the company’s chairman to take control of the boardroom. The professional managers on the ITC board had a different perspective of the company and wanted to shed its ‘tobacco’ profile gradually in view of the world-wide campaign against the product as ‘dangerous to health’ by diversifying into other areas — from hotels, printing and packaging, soaps and cosmetics to packaged food. The institutional (FIs) support to the professional management over the years has turned ITC as one of the country’s fastest growing FMCG companies, protecting shareholders, including Batco, against steady fall in cigarette sales and income. Most joint stock Tata companies are underrepresented by FIs on their board of directors. Time is certainly rife for the government to act decisively against the whims of minority promoters to take board room control to run the companies as per their will.

Among the associate Tata companies where Tata Sons has no controlling stake but runs them as their own enterprises are: Tata Steel, Tata Motors, Tata Power, Tata Chemicals, Tata Global Beverages, Indian Hotels, Voltas and Titan Industries. Ever since, Tatas removed Cyrus Mistry as chairman of Tata Sons Limited, share prices of all these major Tata companies are down or depressed with their gross market value dropping by several hundreds of crores of rupees. The government and public shareholders were the worst losers. The board of Tata Chemicals have already supported Mistry as their chairman. This has angered Tata Sons so much that they are out to prevent repetition of such acts in other boardrooms to seize the control of those companies. The government must act fast to prevent such evil designs by minority promoters to protect the interest of those giant stock exchange-listed firms employing thousands of people, generating massive income for the companies, making big contributions to the government by way of direct and indirect taxes and levies and shareholders’ pockets. The companies should be allowed to run as professionally-managed entities and not subjected to be victim of petty personality-oriented Tata politics and manipulation of independent directors.

There is no doubt that the Tatas have once played a big role in promoting and expanding these enterprises. But, that was mostly done by giving the professional management full authority to run those enterprises. Unfortunately, the boardroom atmosphere in these companies is lately vitiated by internal dogfight to dislodge the young, dynamic leadership of Cyrus Mistry, who has fallen foul with the current Trust Trusts chairman, who controls privately owned Tata Sons Limited, for unclear reasons. The Tata Sons chairman is sparing none, including India’s confectionery baron Nusli Wadia, an old friend, who reportedly supports Cyrus Mistry. It is an open fight between the Tata Sons chairman and Cyrus Mistry that is affecting the future of some of the country’s biggest public enterprises. The government must act in the interest of all stakeholders in these giant enterprises and the public at large to prevent a serious boardroom chaos in these widely-held companies. Using media campaign against Mistry and levelling charges to tarnish the image of the current chairman of some of the giant Tata associate companies by minority promoters, is unthinkable and unheard of in the annals of management of widely-held joint-stock enterprises of such repute. This must stop as early as possible in the interest of these enterprises and the country.

Post industrial revolution, all private enterprises all over the world were set up by their private promoters. But, those which grew really big over the years as multinational corporations outlived their promoters. Most of the present global enterprises created by their smart, forward looking, legendary promoters — from John D. Rockefeller, William Boeing, Thomas Edison and Charles Coffin of General Motors, Sakichi Toyoda of Toyota Motors, the Iwasaki family, founders of the Mitsubishi business empire, Werner von Siemens, Walt Disney, Andrew Carnegie, Benjamin Franklin to Bill Gates — have gracefully outlived their creators under the stewardship of professional managers. Bill Gates, until recently the world’s richest person, happily left Microsoft, to take up philanthropic work across the world to serve the poor. His Microsoft is doing extremely well under professional managers. Back in India, it seems that nearly 80-year-old Ratan Tata still feels that the future of over-a-century-old business empire that was once built by late J.N. Tata and expanded with the help of dedicated professional business managers over generations, is unsafe in the hands of ‘outsiders’ although many feel he would probably do well to devote rest of his active retired life to serve Tata Trusts to benefit the community than meddle into the affairs of widely-held Tata companies. (IPA Service)