The dogs are the first thing you notice as you turn away from the hustle of downtown Mumbai and into Tata Group’s modest headquarters. Two scruffy-looking specimens amble round the reception, while another lolls contentedly by the security X-ray machines.
The story goes that, one wet monsoon evening, Ratan Tata – head of India’s largest conglomerate, one of the world’s most influential industrialists and a keen dog-lover – decreed that any strays outside the complex be allowed to shelter. Some have never left.
The tale illustrates nicely why so many in India revere Tata, who at 74 is about to retire after more than two decades as chairman of the group, and whom I have come to meet for afternoon tea. He enjoys a perhaps unique status – part corporate titan, part secular living saint – a man with a reputation for decency and integrity in a country where traditional moorings are thought to have been undone by corruption and rapid economic growth.
I mention the corporate slumdogs as we settle down to talk in one of the colonial-era building’s private dining rooms. Tata, dressed formally in an elegant woollen suit and dark blue tie, smiles broadly and laughs. His face is tanned but lined, and he speaks with a gravelly American accent, a legacy of time spent studying architecture at Cornell University in the early 1960s.
He apologises for our meeting being over tea rather than lunch, blaming the hectic schedule of his final weeks in charge. We are seated in red leather chairs around a large oak table, decorated with yellow flowers, and he mentions there is a secret button underneath, to summon waiters from a nearby kitchen.
Two duly arrive to take our orders, dressed all in white, bar a blue Tata logo on their shirts. It is a logo seen everywhere in India, from tea bags and trucks to the many schools and hospitals supported by the group’s charitable arm. But the emblem is increasingly well-known abroad, after two decades during which the conglomerate and India itself have followed oddly parallel paths.
In 1991 Tata, who had joined the family firm from university and worked initially on the shop floor, took over as chairman from his uncle, JRD, who had been in charge for more than half a century. This was also the year in which India opened its economy to the world and both country and company have grown hugely since, with Tata now operating in more than 80 countries. What began almost 150 years ago as a small textile and trading operation has become India’s most important industrial business, with operations stretching from steel and cars to power plants and IT outsourcing. This year it earned revenues of over $100bn, more than half of it abroad, while employing around 450,000 people.
Yet despite earning a place among the top tier of global companies it remains an unusual group, with a complicated ownership structure linking its main holding company, Tata Sons, with more than 100 operating companies below. Tata Sons, in turn, is two-thirds-owned by a charitable trust, which distributed more than $100m in profits to good causes last year.
Tata himself stands out from other Indian tycoons: he lives an unpretentious life, holds only a small amount of the group’s stock, and conspicuously does not appear on the annual Forbes magazine list of Indian billionaires. Later this month he cedes control to Cyrus Mistry, his 44-year-old deputy, who will become the first non-Tata family member to run the group since it was founded in 1868 by Tata’s great-grandfather Jamsetji.
I’m struck by the fatherly manner in which he describes the year-long handover process. “What I’ve been involved in is trying perhaps to be there, but to step back, to let Cyrus express his views more at meetings, and to say less, unless I feel very strongly about something, and to give him his space in his position,” he says.
Recalling his own first decade in charge – a period during which he fought a series of fierce internal battles to centralise control of the group, and gradually improve its performance – he singles out one particularly trying episode: the sale of the detergent and soap arm to Unilever in 1993. “The backlash that I got, both in the media and the stock market, and from our own employees internally, was scary for a new chairman – and in an environment where we had first and second-generation employees, and Tata employment was said to be lifetime employment,” he tells me. “After that, I was very careful about what I embarked on.”
Nevertheless, his second decade was defined by an adventurous rush for global growth, as Tata pushed his company abroad, aiming to capitalise on India’s rising economic heft. This was especially true in the UK, where the group is now the largest manufacturing employer, a legacy of a series of eye-catching takeovers, including the purchase of steelmaker Corus in 2007, and struggling British carmaker Jaguar Land Rover one year later.
It is an expansion he looks back on with satisfaction but he admits to a few regrets too. “Where I feel that we perhaps have not succeeded as much as we should have, has been in meeting some of the goals of the mindset change that I’d hoped we should have – a flatter organisation, more interchange between companies,” he continues. “But, at the same time, we did whatever we did without sacrificing any of our ethics, or value systems, including efforts made to draw us into the morass at the time of the 2G scam.”
I had intended to bring up India’s problems with crony capitalism, although I am a little surprised he raises this episode without prompting. The scam in question involved the corrupt allocation of second-generation telecoms licences in 2008, which Indian auditors later suggested caused the country to lose billions of dollars in tax revenues.
The Tata group was not implicated directly but Tata himself was later drawn in, via an episode known as the “Radia Tapes”, in which secret government recordings of phone calls made by lobbyist Nira Radia were leaked to the press. Radia sometimes worked for the group, and the leaked recordings included a few conversations between her and Tata.
The controversy clearly still pains him. “We were cleared by the investigative authorities of any involvement in the scam,” he says, with an injured look. “Nira Radia was in the middle of it. Certainly, we had operations and telephone calls with her, because she was our PR company, and so undoubtedly we had interaction with her through this time, and before that time, but we never lobbied or politicked as the media tried to insinuate.”
At this point the waiters re-emerge, carrying individual trays with silver teapots and slices of dark brown plum cake. Either Tata’s tastes are known to the kitchen – the tea he pours is just about the weakest I’ve ever seen – or he is too polite to complain. It isn’t an entirely implausible thought: those who know him speak of his elaborate courtesy; he warmly thanks the waiting staff.
He takes his tea plain, while I opt for the more typically Indian “chai” – milky, with plenty of sugar. The tea itself is Tetley, an appropriate choice, given Tata’s purchase of the British tea maker in 2000 signalled the start of his global expansions.
Of the group’s later landmark deals, carmaker Jaguar Land Rover has proved a great success, boosted by soaring demand in China. Corus, now the European arm of Tata Steel, has done less well, following a drop in global steel demand. In retrospect, I wonder, would he admit the deal was a mistake?
“No, I would not. What we had no way of knowing was the economic downturn that would follow … The timing was inappropriate but not of our doing.” What does seem to rankle is the $13.1bn the group paid. “When I told Tata Steel that we should buy it, it was about $5bn, it was the way the management dragged on, almost trying to push the acquisition away.” It is a telling remark, and one which illustrates the challenges of running the conglomerate, where a chairman must manage by persuasion and moral authority, as much as by direct control.
I ask about the project with which Tata is most personally associated: the Nano, an ultra-cheap car suitable for India’s poor. It was a pet project of the chairman, who is passionate about automobiles, but it has sold only modestly since its launch in 2009.
“I think there is no sense in saying that I’m satisfied. I’m very depressed. I think that we were too, how shall I say? Too satisfied. We had this terrific launch, a lot of global attention, the plant was almost ready,” he says, then explains with pleasing candour how production delays, along with problems involving the group’s car dealership network and advertising strategy undercut the project.
“When we had to go and market the product, we had been complacent,” he says. “But I still believe that it can be resurrected and it’s still attracting attention from countries like Indonesia and Malaysia, and we should exploit that.”
I take a bite of my plum cake. Tata hasn’t touched his but sips tea quietly as I ask for his views on India and its rapid recent changes. “I feel India is a country that really has an enormous amount of potential, has the human capital to succeed. But if you sit down and say, ‘Will it succeed?’, you see imbalances.”
He mentions various policy problems that hamper businesses, from energy shortages to land acquisition. Such things have been part of the reason his group has sought growth overseas, initially in Europe but, he says, in future more likely in Africa and elsewhere in Asia. “If we had the same kind of encouragement to industry … I think India could compete definitely with China,” he says. “Certainly the political system in China could get more things done than a democracy might, but given even that difference, I think that India has a big market … It has a rule of law, it has a common language. There are many, many things that stand in India’s favour.”
Our tea is now getting cold, so I ask about his own future plans. He has a reputation as a man who dedicated his life to his company; I ask if he now regrets not marrying and having a family. “They’re interrelated because, obviously, if I had a family, I could not have spent as much of my time involved with the group. And, things would be very different, in terms of eating, sleeping, living for your job,” he says. “And yet it hasn’t felt like a job. It’s been more like a personal issue. It hasn’t been for money, it hasn’t been for visibility. It’s just been the challenge and, to a great extent, the passion, in terms of how I have looked at my job.”
He is looking forward to his new role running Tata’s charitable trusts, in particular developing projects on child nutrition, clean drinking water, and low-cost housing. “I don’t intend to have an idle time,” he says. Flying is another passion, and he mentions this may also occupy him more. “I fly in the company plane. Now that will have to change,” he notes, with a rueful smile. “So I’ve been looking at probably acquiring a small single engine plane, or a helicopter to keep my love alive.
“There are things like music and painting that I used to be involved in. We always miss something that we did at one time, and haven’t had the chance to do, and those kinds of things I probably want to try to get back,” he adds.
What about his own image? “I would hope that people would say that I was able to lead the group with dignity and that I tried to do the right thing. You never succeed, having that said, because you always have upset somebody or another, but I think that’s what I would like to be remembered for.”
With this rather modest statement, he says goodbye and heads off to meet a chief executive who has been kept waiting while we finish our discussion. As I walk out, the dogs are still sprawled out in the reception. I’m told later that their future in Tata’s lobby is secure, even after the man who granted them residency departs. They are unlikely to be the only ones sad to see him leave.
James Crabtree is the FT’s Mumbai correspondent
Small Dining Room
Bombay House, Mumbai
Tea x 2