India’s Tata in race against time to save global

MUMBAI: India’s largest conglomerate Tata faces one of the most turbulent periods in its long history after its shock decision to sack its chairman, analysts say, as it battles to save its global reputation.

Seventy-eight-year-old patriarch Ratan Tata dramatically returned to the helm of the family business this week after he became upset at the direction Cyrus Mistry was taking the sprawling group.

The abrupt sacking Monday, out of character for the 148-yearold organisation, has plunged the US$ 100 billion conglomerate into acrimony and highlighted its divisions at a time when it faces major financial challenges.

“Tata group is going through an economic crisis and most of its businesses are not performing well,” G.

Chokkalingam, managing director at Mumbai-based Equinomics Research & Advisory Pvt, told AFP. Tata Group’s revenue slipped 4.6 per cent for the financial year ended March to about US$ 103 billion.

One of its worst performers is Tata Steel, which last month reported a quarterly net loss of almost 32 billion rupees ( US$ 475 million), as it winds back its European operations.

The company announced earlier this year that it was selling its lossmaking British assets owing to a global oversupply of steel, cheap Chinese imports into Europe, high costs and currency volatility.

Tata Motors’ profits have also slowed because of falling sales of Jaguar Land Rover (JLR) in China as the country’s economy stutters, while IT behemoth Tata Consultancy Services is suffering from cautious client spending in the face of an uncertain global economic outlook.

“It was not any leadership problem but economic factors that played out in ousting Mistry,” said Chokkalingam, suggesting he had unfairly lost his job over circumstances out of his control.

An outstanding payment of almost US$1.2 billion to Japan’s NTT Docomo is also tarnishing Tata’s reputation abroad.

“It could take a new leader 10 years to get control of things and maintain Tata Group’s image,” Mahesh Singhi of corporate advisory firm Singhi Advisors told AFP: Tata led the company for 21 years during arguably its most successful period, increasing the group’s revenues from around US$ 6 billion to US$ 100 billion as he made a string of big-name purchases. — AFP

In this photo taken on May 27, Tata Sons Chairman Cyrus Mistry poses during the launch of the ‘Cliq’ online store in Mumbai. India’s Tata Sons dumped Cyrus Mistry as its chairman in a surprise announcement October 24, almost four years after his...