The mantle to head the $103-billion House of Tatas which has been caught in a protracted and public boardroom battle between Ratan Tata and its former Chairman, Cyrus Mistry, has fallen on Tata Consultancy Services veteran, Natarajan Chandrasekaran, popularly known as ‘Chandra.’
WATCH VIDEO | Natarajan Chandrasekaran Named New Chairman Of Tata Sons
Tata Sons, the holding company of the Tata group, on Thursday decided to appoint 53-year-old Chandrasekaran, who is now Managing Director and CEO of the group’s software unit, as the new Executive Chairman, bringing an end to the uncertainty over the successor of Ratan Tata who became the Interim Chairman of the company after the ouster of Mistry on October 24 last year. The Tata Sons board which met here today, chose Chandrasekaran following the “unanimous recommendation” by the five-member search committee comprising Ratan Tata, TVS Group head Venu Srinivasan, Bain Capital MD Amit Chandra, former diplomat Ronen Sen and Lord Kumar Bhattacharya. Chandrasekaran will take charge from February 21.
“Chandrasekaran has demonstrated exemplary leadership as the CEO and Managing Director of Tata Consultancy Services. We believe he will now inspire the entire Tata group to realise its potential acting as leaders in their respective businesses, always in keeping with our value system and ethics and adhering with the practices of the Tata group which have stood it in good stead,” the board of Tata Sons said in a statement.
There were other candidates, including former Unilever Chief Operating Officer Harish Manwani; Trent Chairman (and also half-brother of Ratan Tata) Noel Tata; UK industrialist George Buckley, in the race for the top job at the Tata group.
However, sources said Chandrasekaran was selected as he had spent three decades with the Tatas and proved his mettle with the growth of TCS, the largest software company in India. He was the CEO and Managing Director of TCS since 2009. There were indications that Chandrasekaran was being prepared for a larger role as he was appointed as a Director on the board of Tata Sons on October 25, a day after the unceremonious sacking of Mistry.
Under the leadership of Chandrasekaran, a passionate long-distance runner who has completed several marathons around the world, TCS has generated consolidated revenues of $16.5 billion in 2015-16. With over 371,000 consultants, TCS has become the largest private sector employer in India with the highest retention rate in a globally competitive industry.
TCS remains the most valuable company in India ended 2015-16 with a market capitalisation of over US $70 billion. Under Chandra’s leadership, TCS was rated as the world’s most powerful brand in IT Services in 2015.
“We are sure that this (appointment) will enable the Tata group to continue in its endeavour in retaining their premier position in the country,” SBI Chairman Arundhati Bhattacharya said. Chanda Kochhar, MD and CEO, ICICI Bank said, “He has led TCS to become a global technology major. His global experience, deep business acumen and long association with the Tata Group will prove invaluable in his new role. I have interacted closely with him over the years, including in government-industry forums. He is always warm, engaging and insightful.”
Chandrasekaran joined TCS in 1987 after completing his Master’s in computer applications from the Regional Engineering College, Trichy, Tamil Nadu.
Chandrasekaran’s performance will be closely watched by the corporate world as Mistry’s main complaint was that he was not given a free hand and Ratan Tata and other directors of Tata Trusts allegedly interfered in the functioning of Tata Sons. Mistry, who was also chosen by a five-member panel in 2011 to succeed Ratan Tata, took over the reins of the conglomerate when the veteran industrialist retired on December 29, 2012, when he turned 75.
On October 24, 2016. Mistry was asked by the Tata Sons board to step down as the Chairman of the company, but he initially refused. He had to go as six out of eight directors voted for his removal, triggering an acrimonious battle in the group. While moves and counter-moves are still being played out at, markets, shareholders and analysts were confused, divided and worried.
Both the sides were engaged in a see-saw battle making accusations and allegations against each other since Mistry’s removal from the Tata Sons board. While Mistry was removed as Chairman of several companies including TCS, Tata Steel, Tata Teleservices and Tata Industries, he voluntarily decided to resign from Tata boards in December.
The Mistry family holds over 18 per cent stake in Tata Sons while the Tata Trusts, headed by Ratan Tata, controls 66 per cent.
On December 20, a day after resigning from the boards of listed Tata group of companies, Mistry filed a suit in National Company Law Tribunal (NCLT) against Tata Sons for “oppression and mismanagement” in the Tata group holding company.