After growing revenues more than 25 times since he took charge in 1991, Ratan N Tata is going through the pace to hand over the reins in 13 months. Even as he would work with Cyrus P Mistry to ensure a smooth transition, speculation abounds about Ratan Tata’s future role within the Tata Group.
While a Tata Sons spokesperson said that he will “completely retire from the group, as stated, with no executive or non-executive role assigned to him.”
That explanation, however, may find few takers. For one, Tata appears to have acquired a larger than life stature within the group. For another, he will continue to head the two trusts — Ratan Tata Trust and Dorab Tata Trust — that together control 66% of the equity of Tata Sons, which in turn is the holding company of Tata Group.
According to the Tata Sons spokesperson, the trust constitution mandates that the trust chairmen occupy the position for life.
“It was a similar situation in 1991 when Ratan Tata took over as chairman of Tata Sons and J R D Tata remained chairman of the trusts,” said the company spokesperson, adding that it is not necessary that the Tata Sons chairman will end up becoming the chairman of the Trusts after Ratan Tata retires.
Industry watchers say Tata’s role in the group after December 2012, when he retires, is as yet unclear.
“For next one year he continues to be the chairman. We don’t know yet what future role he is going to take. It is too early to take a call on it,” said SP Tulsian, an independent analyst.
Ratan Tata has been the chairman of Tata Sons, the promoter holding company of the Tata group, since 1991. He is also the chairman of the major Tata companies, including Tata Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Global Beverages, Tata Chemicals, Indian Hotels and Tata Teleservices. During his tenure, the group’s revenues have grown manifold, totalling over $83 billion (R4,349.2 crore) in 2010-11.
The great grandson of Jamsetji Tata, the group’s founder, Ratan Tata, joined the group in December 1962, after turning down an offer from IBM on the advice of JRD Tata.
He used to earlier work at the Tata Steel’s Jamshedpur steel plant with other blue collar employees at the blast furnace.
After serving in various companies, he was appointed director-in-charge of the National Radio and Electronics Company in 1971. In 1981, he was named chairman of Tata Industries, the group’s other promoter holding company, where he was responsible for transforming it into a group strategy think-tank, and a promoter of new ventures in high technology businesses.