Tata Sons forms panel to scout for new chairman

The $71-billion Tata Group on Wednesday said it had begun the process to select a successor for its chairman, Ratan N Tata, who is due to retire by the end of 2012.

The group’s holding company, Tata Sons, said it had formed a five-member selection committee, to scout within the group as well as oustide and overseas. One of the members will come from outside the group.

Though names of the committee members have not been officially disclosed, people familiar with the development said the committee is likely to have R Gopalakrishnan and R K Krishna Kumar, both executive directors of Tata Sons; N A Soonawala, who retired last month and will represent Sir Dorabji Tata Trust; and A N Singh, managing trustee of Sir Dorabji Tata Trust and

J R D Tata Trust. The external candidate is likely to be Nusli Wadia, an independent board member of Tata Steel and Tata Motors, and a long-time friend of Ratan Tata, although the name of former Hindustan Unilever chairman Keki Dadiseth is also doing the rounds in some circles.

Ratan Tata will play only an advisory role and will not be part of the selection panel.

The group said it expects to complete the final selection in “adequate time to effect a smooth transition.”

“The committee has commenced its work,” Tata Sons said, adding “it is in the process of formulating criteria for identifying the most suitable candidate, taking into account the global nature and complexity of the group’s business at the present time.”

Tata Group's 98 operating companies have 357,000 employees and nearly 65 per cent of its revenue comes from outside India.

The announcement comes within days of Noel Naval Tata, half-brother of Ratan Tata, being moved into a new role within the group. Noel, who is seen as one of the contenders for the top post, recently resigned as the managing director of retail firm Trent and joined Tata International, which handles the group’s overseas trade, in the same position.

He was appointed the non-executive chairman of Tata Investment Corp Ltd, a listed investment firm that has a substantial holding in Tata Group companies. He had taken over from N A Soonawala, a trusted lieutenant of Ratan Tata.

Noel Tata is the son-in-law of Pallonji Mistry, the largest single shareholder in Tata Sons, the controlling arm of the diversified Tata Group, with an 18 per cent stake. Mistry’s sons, Shapoor and Cyrus, are on the boards of Indian Hotels and Tata Power. Cyrus is also a director of Tata Sons.

New positions would give Noel, who has been handling retail for 11 years, more exposure in group-wise finance and export activities.

Ratan Tata’s move to the corner office in the Tata Group was also a long one.

He was assigned to various companies before being appointed director-in-charge of the National Radio & Electronics Company (Nelco) in 1971. It took him 10 more years to become chairman of Tata Industries and another 10 years for taking over the chairmanship of Tata Sons from J R D Tata.

The Tata group, founded in 1868, runs India’s top vehicle maker, Tata Motors, top software services firm Tata Consultancy Services, leading private sector power producer Tata Power and the world’s seventh-largest steel maker by output, Tata Steel.