FC businessman of the year
Dec 30 2009 , Mumbai
But that’s not the reason why we are giving the 72- year- old chairman of the Tata group, Ratan Naval Tata, the FC Businessman of the Year honorific.
The Financial Chronicle senior editorial team went through several names out of which three stood out—Sunil Bharti Mittal, Anil Ambani and Anand Mahindra.
Each in his own way mades waves during the year. Mittal’s Bharti Airtel almost bagged the biggest deal in the country’s history, a $23 billion African ambition that would have catapulted a 14- year- old Delhi company to the global number three in terms of subscribers with MTN — almost.
Ambani created a groundswell of his own kind by taking on the might of the government and challenging his brother Mukesh Ambani. Sibling rivalries may be common in corporate cut and thrust, yet ministers and ministries being challenged openly by a group which had grown on government patronage was a new window into the soul of India’s capitalists.
Mahindra provided a sheen of respectability to a company embroiled in the worst corporate stink in decades, by buying out Satyam Computers so callously thrust into a circle of corruption by the Rajus.
Yet, one great decision or mere shaking up of the establishment was not enough for our editorial team. And a miss is a miss.
Tata is a charismatic leader with extraordinary entrepreneurial skills, as several of his contemporaries have said in our detailed report on the group, who has taken his business house to global heights never achieved before, touching a market cap growth of over 145 per cent this year. But that too is not the reason why we call him the businessman of the year.
What clinched the deal for us was, in one word: courage. The courage to stand up to the might of the British government when it wanted to impose onerous conditions of control in exchange for a bridge loan for Jaguar Land Rover; the courage to say ‘no’ to a mob mentality in Singur, West Bengal, where passions were whipped up by politicians of many hues against Nano; and finally the quiet courage to put balm on a hurting nation attacked from across the border on 26/11, and his resolve to bounce back, finding time to visit each family of the affected 84 members of the Taj group, and several dozen others hit elsewhere in Mumbai.
We may expect courage from our leaders, even our business leaders, but it’s not an easy quality to come by. To stand up for what’s right in times of crisis is even more daunting.
Tata showed that he’s made of stronger stuff than we hoped for. And for this we happily invite him into the FC Hall of Fame, in a tribute from the youngest daily to the oldest business group.
Tata’s achievement have been reflected in the almost 13 per cent growth that the group achieved in a year of recession, underlining the inherent strength of the house that Jamsetji Nusserwanji Tata built some 140 years ago. As a corporate dynasty, it is perhaps the oldest, with the fifth generation family member, and possibly the last, at its helm since 1991.
The group has over 114 companies with operations in more than 85 countries and 350,000 employees. The story of its global expansion is not very old, though.
It started in 2000 with the acquisition of Tetley, with Tata-Tetley becoming the world’s second largest tea maker. Since then, and till October last year, it acquired 21 more companies, including some global names such as Corus and Jaguar Land Rover. It also obtained over 20 per cent stake in 31 other companies.
Last financial year, almost two-thirds of its revenues came from abroad, turning it into the first truly Indian multinational.
No wonder Tata has been talking of a foreign boss as the next head of the hotels-to-power group. Yet, for over a year, the group has not announced any acquisition. Global ambitions also lead to global problems. It was almost exactly a year ago that Tata wrote in a New Year letter to employees asking them to be prepared for hard decisions. And it did face unprecedented challenges. Its auto flagship, Tata Motors, was struggling to raise funds, thousands faced lay-offs and factories were being shut down.
Its newly acquired iconic brands Jaguar and Land Rover were looking at Europe for bailouts. Its steel acquisition, Corus, wanted to sack 3,500 employees, seeking some one $1 billion in government handouts.
But not all the blame could be laid at the door of recession. From the dawn of the new century, Tata had driven the acquisition spree based on the group’s global reputation and some $18 billion in borrowed money.
The haste to develop a global profile with cheap money came somewhat unstuck when the financial towers of the West started crumbling last September. In 2007, analysts had questioned whether in his zeal to acquire a big ticket, Tata had not overpaid, by at least 20 per cent, to acquire Anglo-Dutch Corus for $12 billion.
The Tata chickens, it appeared, were coming home to roost. Tough times call for tough decisions. Tata showed mettle when he stood up to the British government preferring to go to the market to tide over the difficult phase.
From Singur he chose to move out manufacturing of its small car to Gujarat and convert part of the assembly lines in Uttarakhand and Pune to meet the demand.
A year is a long time in business. And Tata seems to have come out of its most trying period with the group’s reputation intact.
The 2009 survey by New York-based Reputation Institute has ranked Tatas as the 11th most reputable group out of 600 global names. For a combine which felt emasculated by government control just two decades ago, that’s seems like an extraordinary journey.