Indian awarded its highest civilian award, Bharat Tatna (Jewel of India) to ex-chairman of the Tata group Mr Ratan Naval Tata

Jewel of corporate India

Indian awarded its highest civilian award, Bharat Tatna (Jewel of India) to ex-chairman of the Tata group Mr Ratan Naval Tata. -ST
Ravi Velloor

Tue, Mar 19, 2013
The Straits Times

It has been a few years since India announced its highest civilian award, Bharat Ratna, which, from the Hindi, translates as Jewel of India. But at some point, it may well go to the man who just stepped down as chairman of the Tata Group, the salt-to-software conglomerate.

For Mr Ratan Naval Tata, who was in Singapore last week, is no ordinary man. And the Tata Group, no ordinary enterprise.

You could start your morning with Tetley Tea, sprinkle Tata Salt on your fried egg, live in a home constructed with quality metal from Tata-owned NatSteel, call your secretary from a Tata phone, travel on an airline whose computer systems are supported by Tata Consultancy Services, stay in a Taj luxury hotel, watch television on Tata Sky direct-to-home service and if you are wealthy enough – own a Jaguar, also a Tata brand. At the other end of the spectrum, those aspiring to trade up from a motorcycle may consider the Tata Nano, the world’s cheapest car.

Such is the brand universe of the group, whose turnover, at more than US$100 billion (S$124 billion) annually accounts for a little more than 5 per cent of the gross domestic product of India, Asia’s No. 3 economy after China and Japan.

When he turned 75 two months ago, Mr Tata stepped down from actively running the group to take on the title of chairman emeritus. By then, he had led for 22 years, after moving, tentatively at first, into the shoes of the legendary J.R.D. Tata, his uncle, whose many accomplishments included founding Air India and running it as the classiest airline in his time.

The records show that Mr Ratan Tata grew the group at an annual rate of 20 per cent. If the late “JRD” consolidated Tata’s position in India, the younger man’s contribution to the group was to take it overseas in a big way, acquiring global brands such as Corus Steel and probably his smartest acquisition of all – taking the unprofitable Jaguar Land Rover and turning it into a money spinner. From 5 per cent when he took charge, today two-thirds of group revenue is generated overseas.

That push to globalise is proving handy as growth in India slows to a crawl and politicians push a populist agenda ahead of national polls due by the middle of next year.

Mr Tata does not expect growth to return to 8 per cent any time soon. “Today, the unfortunate fact is we see more opportunities outside India than within it,” Mr Tata, who sits on the international advisory panels of Temasek Holdings and the Monetary Authority of Singapore, conceded to me ruefully on the sidelines of a morning he spent with students at the Singapore Management University.

Tata currently operates in 85 countries and employs 450,000 worldwide, including Singapore, where, starting with Tata Precision Industries in 1973, no fewer than 14 group companies have a presence now. Mr Tata himself was awarded honorary citizenship of Singapore in 2008. In India, the Tata reputation is impeccable, untarnished by the allegations of bribery, greed and ostentation that are attached to some of Mr Tata’s peers.

That good name was not built easily. And sometimes, he conceded last week, it came at considerable cost to the business. For instance, 15 years ago, Tata and Singapore Airlines entered a joint venture to start a domestic airline in India. To everyone’s surprise, the Indian government blocked the proposal repeatedly, often in bizarre ways, as when it ruled that while foreign investment in airlines was welcome, foreign carriers could not be investors.

Mr Tata will not say it outright, but the world knew what had happened – the aviation minister had been influenced to prevent Tata-SIA from flying.

“Sometimes,” says Mr Tata, “corruption is generated not in government itself but in vested private sector interests. In this case, another private airline was keen to prevent competition and they made it impossible for us through three successive governments. As a company, we will not bribe our way to a solution.”

Earlier this month, on March 6, Tata and Air Asia signed an agreement to set up a joint-venture airline – and immediately veered into turbulence generated by the Indian Civil Aviation Ministry. Still, experts say, the deal, in which Tata holds 30 per cent and the Malaysians 49 per cent (the rest is with an Indian partner), has good chances of getting off the ground this time.

That should bring cheer to the amateur pilot and flying enthusiast who owns a Falcon 2000 and was allowed to try out Boeing’s F-18 Hornet at the Bangalore Air Show two years ago.

Mr Tata’s climb to the pinnacle of corporate India, which began in 1962, wasn’t easy. Indeed, when he was brought in as chairman 22 years ago this month, some of the old-boy herd of Tata elephants at Bombay House, used to running individual fiefdoms, actively resisted him. But one by one he wore them down, including Russi Mody, the much-loved boss of Tata Steel, whose massive reputation included a penchant for wolfing down 16-egg omelettes and who once accompanied Albert Einstein on piano while the great physicist played the violin.

It helped internally that Mr Tata had his uncle around in his initial years. Outside, meanwhile, India itself was opening its economy and dismantling state controls, making it easier to access capital for expansion and acquisitions.

In February 2000, Mr Tata made his first significant overseas foray, buying Britain’s Tetley Tea for US$430 million. Others, such as Singapore’s NatSteel and Britain’s Jaguar Land Rover, would follow. Later this year, Tata will take Jaguar Land Rover into China, the first time the brands have been manufactured outside their British home.

Along with such victories abroad came disappointments at home and sometimes controversy, as his frustrations with corrupt India mounted. First was the failed joint venture with SIA. Then, four years ago, Mr Tata had to move his Nano factory from rural West Bengal state and across the country to Gujarat, thanks to resistance from the firebrand leader Mamata Banerjee, then in opposition and today Bengal’s chief minister.

It fetched a rare political comment from him about “good Ms, and bad Ms” – an unfavourable reference to Ms Mamata even as he praised Gujarat’s investment-friendly Chief Minister, Mr Narendra Modi, the “good M”. Subsequently, a fixer for the Tata Group, who enjoyed direct access to the chairman, was revealed in leaked tapes to have performed too aggressively in pushing for valuable electronic spectrum for its telecom business.

None of this reduced his lustre, or the group’s. Indeed, the Tata mettle shone through after Mumbai was attacked by terrorists trained in Pakistan, leaving the iconic Taj Mahal Hotel, owned by the Tatas, in flames. They swung into action to rebuild the hotel within two years and soon hosted United States President Barack Obama, who meaningfully stayed there during a trip to Mumbai. To its great credit, all staff were put on full pay during the renovation and the family of every hotel employee who died in the attack was assured of his emoluments all the way to the dead man’s presumptive retirement. “The terrorists brought us to our knees but they couldn’t destroy us,” says Mr Tata. “We proved Bombay was not a soft target.”

The social responsibility ethos permeates the DNA of the group. When Gujarat was struck by an earthquake, for instance, Tata adopted eight villages. Long after the TV cameras were gone, Tata employees stayed on the scene until the hamlets were rebuilt. US-based software engineers from the group have been spotted doing relief work during the New Orleans cyclone.

Today, fully two-thirds of the group’s profits are ploughed back through trusts into charitable activity, while individual companies in the conglomerate do more independently.

Mr Mukesh Ambani, India’s richest man, lives in a US$2 billion mansion with a view that commands most of Mumbai, from the sea to Asia’s darkest slums. Mr Tata, who as a boy was driven to school in a Rolls Royce, lives in a comparatively modest apartment in South Mumbai. “While he is one of the most successful businessmen in the world, he remains unassuming, humble and low-key,” says Professor Rajendra Srivastava, provost and deputy president of Singapore Management University (SMU), who began his career as an intern with Tata in 1971.

“He is also an exemplar of a leader committed to ‘triple bottom lines’ – business performance, accountability to employees and customers, and environmental and social responsibility.”

Flat-bellied at 75, his wavy hair still black in places, it remains a mystery why the lanky, Cornell-educated architect never married. Some wonder if it is his innate shyness, a trait he was forced to overcome over the years, starting from the time he had to shovel coal into a furnace at Tata Steel. Others think he is still too much of a loner. Certainly, when he gets home, his only companions are his servants and two German shepherd dogs on which he dotes.

“I tend to be pretty moody after a bad day,” he told an SMU student, who asked what made him happy. “Just to be home with the two dogs who seek nothing from you except your attention and affection – that’s a lovely feeling. Human beings have forgotten how to do that.”

The late JRD got his Bharat Ratna at age 92, the year before he died.

For Mr Tata, the wait may not be as long. Meanwhile, those who wish to see him so crowned can console themselves that he already has Ratan, or “jewel”, in his name.