Power Without the Patriarch

Differences in the top echelons of the Tata group are out in public. Without Ratan Tata's steady hand, one of India's biggest conglomerates is facing a power struggle

- Vikash Tripathi and Yuthika Bhargava

A patriarch holds the family firm not because everyone agrees with him but because his shadow is too vast to contest. Empires often crumble within years of the passing of the one figure who kept personal ambitions in check.

The 156-year-old Tata group finds itself in a similar situation. Its patriarch, Ratan Tata, passed away last year, and now the group is alive with ambitions and rivalries that, some say, could tear the $326bn conglomerate asunder.

Trouble Brewing

The first sign came on September 11 this year. Inside the boardroom of Tata Trusts, the powerful body that controls over 65% of Tata Sons, a vote on the reappointment of former defence secretary Vijay Singh split the seven-member board. Singh, 77, recused himself while the others voted. When the count ended, four were against and two in favour.

It could have ended there, but it did not. Soon after, Singh resigned from the board of Tata Sons, and the long-frozen lines of loyalty within the Tata establishment began to shift once more.

When Ratan Tata presided over the group's affairs, dissent was rare, at least in public. Even after he stepped down as chairman of Tata Sons in 2012, his word remained final on most matters concerning the group's long-term goals. Cyrus Mistry, his successor, lost his position, among other things, for attempting to halt projects such as the Tata Nano and Corus, the loss-making European arm of Tata Steel.

“While Tata is India's most valuable brand and conglomerate, it is also now a part of a much more liberalised economy and active financial market. These broad macro forces inevitably create conditions where there would be a tussle for control,” says Prateek Raj, associate professor of business management and health sciences, University College London.

In Search of Balance