The dad of all Tata group battles: When Ratan Tata took on old guard, and won

Three decades ago, Ratan Tata fought to establish who called the shots inside the Tata Group. Today, a new battle over authority, succession and control is unfolding at the same Bombay House. The headquarters of the Tata Group, Bombay House, has witnessed its share of boardroom battles. But few have echoed the power struggle of the early 1990s, when a young Ratan Tata was fighting to assert his authority over the sprawling Tata empire. The battle of power in the 1990s was more intense than the current tussle between N Chandrasekaran and Noel Tata. The present confrontation erupted after the Tata Sons board reappointed Chandrasekaran as executive chairman for another five-year term and backed steps towards complying with the Reserve Bank of India's (RBI) listing requirements. Noel Tata, Chairman of Tata Trusts, which is the largest shareholder of the Tata Group, opposed both moves. Tata Trusts, which owns about 66% of Tata Sons, subsequently called Chandrasekaran's reappointment a "legal nullity", arguing that the company's Articles of Association (AoA) require the support of its nominee directors. Three decades ago, in the 1990s, Ratan Tata, the former Chairman of Tata Sons, faced a different version of problem. He had inherited the chairmanship of one of South Asia's largest corporations from JRD Tata in 1991. But becoming chairman did not automatically mean that every Tata company answered to him. Some of the group's biggest businesses were controlled by powerful executives who had spent decades building their own empires in the Tata Group. And the first major test came at Tata Iron and Steel Company (TISCO), which is now known as Tata Steel Limited. Ratan Tata was 54 when he became chairman of Tata Sons. Around him stood a generation of powerful Tata executives who had flourished under JRD Tata. Russi Mody ran TISCO, Darbari Seth was a towering figure at Tata Chemicals and Tata Tea, while Ajit Kerkar headed Indian Hotels and the Taj empire. The TISCO's succession fight became a power struggle between Mody and his proteges on one side and the Tata leadership, led by Ratan Tata, on the other. The fiasco was bigger than one man's job. The Tata Group had developed through a relatively decentralised structure in which individual companies and their chiefs enjoyed considerable autonomy. As India entered the era of economic liberalisation, Ratan Tata wanted a more integrated group with stronger central oversight. That brought him into conflict with the old guard of the Tata Group. Mody was the most formidable of them. He had spent 53 years at TISCO and, by the time of his removal, had become almost synonymous with the company. His popularity among employees and his stature in corporate India made him far more than an ordinary company chief. The battle between Mody and Tata became the defining episode of the transition in 1992. Beyond family: JRD Tata and Ratan Tata were distant relatives and shared a close mentor-protege bond. How Ratan Tata managed to cede Russi Mody of Tata Steels. The conflict between the two intensified around succession. Mody had sought to elevate his adopted son, Aditya Kashyap, within TISCO. The move became part of a larger dispute over who would eventually control the company. At the TISCO's Annual General Meeting (AGM) in 1992, Mody stepped down as managing director and Jamshed J Irani was appointed in his place. "The atmosphere was conciliatory on the surface, but the previous year's struggle had exposed the fault lines inside the Tata group," according to the India Today Magazine's 1992 report. A year later, Mody was gone from TISCO altogether. When India Today Magazine interviewed Mody in 1993 after his removal, Mody was remarkably candid about the confrontation. "There is no question of liking or disliking him [Ratan Tata]."