The battle for control of the $265bn Tata Group hinges on a single vote, and it belongs neither to the founding family nor its powerful leadership.
According to a recent Financial Times report, billionaire biker Venu Srinivasan, chairman of motorcycle manufacturer TVS, which among other business ventures owns Eurogrip Tyres, Norton Motorcycles and recently-acquired Hedon Helmets, sits on the board of Tata Sons as one of two representatives of Tata Trusts, charitable bodies that own a controlling stake in the vast Tata conglomerate.
His stance is vital as Noel Tata, chair of Tata Trusts, and Tata Sons chair N Chandrasekaran, known as Chandra, clash over the group’s future, which India’s central bank has ordered to list its shares to comply with shadow banking rules. Noel Tata is trying to fight off the order, while Chandra backs it.
Venu Srinivasan has backed the listing plan and the reappointment of Chandra as group chair to carry it out, casting the crucial vote in a fight that has captivated corporate India and drawn in New Delhi politicians.
The influence Srinivasan wields speaks to a huge, convoluted governance structure, where every important decision depends on the support of ownership trusts, with potential repercussions for companies including Tata Consultancy Services, Jaguar Land Rover Cars and Air India, all shaped by some of the country’s biggest charities.
Politics and the Hindu religion apparently have a less-than-benign influence on these shenanigans, according to Sharmila Gopinath, an independent corporate governance consultant. “The key question is what do the trusts actually want?” he opined. “Srinivasan is the dark horse. We have no idea what he’s thinking and why he’s doing what he’s doing.”
Of course, 73-year-old Srinivasan is an extremely successful businessman in his own right. He remains chairman emeritus of Indian motorcycle manufacturer TVS Motor, which is worth more than $20bn and is a significant exporter. The TVS presence now also extends to ownership of the revived Norton Motorcycles business; its brand spanning both UK and Indian manufacture.
Srinivasan doesn’t own any shares in Tata Sons but has made his support for a public share offer clear, effectively breaking up the Tata Group. Speaking to India’s Economic Times newspaper in April, he hailed the benefit of unlocking value for minority shareholders. His influence is also amplified by contacts in New Delhi. He runs charitable trusts in his home state of Tamil Nadu and is a large contributor to Hindu temple restoration in that region.
This has evidently brought him into close contact with the Rashtriya Swayamsevak Sangh, a Hindu national volunteer movement that is the ideological backbone of Indian prime minister Narendra Modi’s government. Srinivasan may still be a biker at heart, but the might of Tata Group would dearly love to see him riding off into the sunset.