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Creation of Wealth,
by R M Lala.
TATA has been the most respected word in the Indian industrial sphere for more than a century.
The ideals of the founder Jamshedji Tata, have been faithfully carried forward by successive generations of the leaders of the Tata group.
Jamshedji’s sons, Sir Dorab and Sir Ratan, established trusts which ensures that majority of the wealth created by the various Tata companies are expended for the welfare of the common people.
For more than fifty years, JRD Tata was the chairman of the Tata group. The MRTP act had forced him to allow individual Tata companies to follow independent paths. Strong chief executives like Russi Modi of Tata Steel, Sumant Mulgaokar of Tata Motors (earlier TELCO), Darbari Seth of Tata Chemicals, and Ajit Kerkar of Taj group of hotels, had become independent satraps with the encouragement of JRD. ACC, led by Nani Palkhivala has since been sold off.
JRD himself personally nurtured the Airline industry in India by establishing Tata Airlines, the precursor of Air India.
Ratan Tata took over as Chairman in 1991 after the departure of JRD Tata. The reforms brought in by Manmohan Singh as Finance Minister and later as Prime Minister, enabled him to bring the individual companies under the direct control of Tata Sons, the holding company.
Ratan Tata could thereafter build the Tata Group into a truly international industrial conglomerate . TCS is currently the most profitable multi-national company in the Tata fold.
Ratan Tata built up Tata Motors as a multi-national with the acquisition of the Jauguar Land Rover group. Tata Steel acquired the Corus group. Tata Tea acquired Tetley and is now Tata Beverages. New giant companies include the Tata Aviation Services which manufacturer defence and aircraft equipment.
The voluntary retirement of Ratan Tata saw Cyrus Mistry of the Shapoorji Pallanji group becoming the Chairman of Tata Sons. The SP group is one of the biggest construction companies in the country with assets totalling nearly 2 lakh crores. The Mistrys too are Parsis, and are close relatives of the Tatas. They hold nearly 19% of shares in the holding company, Tata Sons.
Cyrus’s ‘profits only matter ‘ motto led to a clash with Ratan Tata, and Mistry was removed as Chairman. The bitter fight that ensued in the courtrooms have now become part of the corporate legend.
The Tata group has now come full circle with the Tata Sons, the holding company becoming a private corporation again, a century after its formation.
Before the appointment of Mistry, there had been only one chairman outside the family, Sir Navaroji Saklatvala, a nephew of Jamshedji Tata. Tata Sons and the various Tata group companies are now managed by eminent professionals led by N Chandrasekharan. Ratan Tata is now Chairman – Emeritus.
Tata Trusts which hold the majority shares of Tata Sons, continue to uphold the ethical and philanthropic ideals of the Tatas, as enunciated by the founder Jamshedji Tata, more than a century ago. The entire profits received as dividend is used to bankroll the scores of philanthropic institutions founded by the Tatas. TIFR Mumbai, TISS Mumbai, IISC Bangalore etc are some such prominent institutions.
The book, Creation of Wealth, by R M Lala takes you through the wonderful journey of the Tata group from it’s inception till the time of JRD. It’s a must read, to understand the difference in philosophy of Tata and the other giant industrial groups in India.
The book is a companion volume to the biography of JRD Tata, also written by RM Lala titled, Beyond the Blue Mountains.
– Joy Kallivayalil.
