The process to find a successor to Tata group chief Ratan Tata has gathered momentum with Tata Sons the main holding company of the group setting up a committee to identify a suitable person. Announcing that the committee has commenced its work,Tata Sons on Wednesday said the Board of Tata Sons,in accordance with its Articles of Association,has formed a selection committee,comprising five members including an external member,for eventually deciding on a suitable successor to Ratan Tata. Tata is due to retire at the end of December 2012. With this announcement,the Tatas have made it clear that the succession issue is still open and the successor will be a person who will be acceptable to other senior leaders in the group. There was intense speculation in corporate circles that Noel Tata who was recently appointed as the MD of Tata International and chairman of Tata Investment Corporation was leading the race to step into the shoes of Ratan Tata. Tata Sons on Wednesday said the Committee is in the process of formulating criteria for identifying the most suitable candidate taking into account the global nature and complexity of the groups business at the present time. The group would require someone with experience and exposure to direct its growth amidst the challenges of the global economy. The selection process for a prospective candidate would consider suitable persons from within the Tata companies,other professionals in India as well as persons overseas with global experience, it said. It is expected that the final selection would be made in adequate time to effect a smooth transition and change of leadership before Ratan Tatas retirement at the end of December 2012, it said. A major factor that is going to help Noel Tata who is the half-brother of Ratan Tata is that hes the son-in-law of construction baron Pallonji Mistry who is the single largest shareholder of Tata Sons,the main holding company of Tata group companies. Mistry holds around 18 per cent stake in Tata Sons and his sons are also on the boards of various Tata companies. Pallonjis younger son Cyrus Mistry is on the board of Tata Sons. Nearly 66 per cent of the stake in Tata Sons is held by various Tata philanthropic trusts. The person heading Tata Sons also becomes the group head and chairman of leading group companies. Pallonji Mistry acquired most of his Tata Sons stake in 1930s and later increased the holding over the years. As per the Tata group policy,retirement age for executive and whole-time directors is 65 years. The retirement age for non-executive directors is 75 years. Tata Sons is the owner of the Tata name and the Tata trademark,which are registered in India and several other countries. These are used by various Tata companies in relation to their products and services. The terms of use of the group mark and logo by Tata companies are governed by the Brand Equity and Business Promotion Agreement,which is signed by Tata Sons and individual group companies.
