A big shift in power

The Tatas are a reconstructed family. They promote talent rather than blood relations. Ratan, the shy loner who heads the Indian group buying Jaguar and Land Rover, was clearly talented, writes Randeep Ramesh.

The words used most often to describe Ratan Tata are shy and loner. The 71-year-old chairman of the Tata Group shuns the media spotlight.

Quiet and unassuming, the Indian business baron drives himself to work in an unremarkable Tata sedan. His beachfront bachelor pad is found in the hippest tip of south Mumbai, but Ratan has only CDs, books and his dogs for company.

He does not drink or smoke. His vices revolve around speed: driving fast cars, flying jets and at weekends racing his speed boat across Mumbai's harbour.

Yet this week Ratan Tata found himself making headlines - and characteristically ducked any interviews. The reason for the attention was that Tata Group found itself cast as reverse colonialists: an Indian company taking over two of the most distinctive British marques in car-making - Jaguar and Land Rover - for a little more than one billion pounds.

A symbol of the shift in power from west to east, Tata is now the ultimate boss of 16,000 British workers who were until this deal employees of US giant Ford.

Like the 24,000 people who worked for Anglo-Dutch steel makers Corus, acquired last year by Tata Steel for £6.7 billion, Britain has become an "insourcing" hub for Ratan Tata: a base for foreign operations of an Indian multinational.

In many ways Ratan Tata is an accidental millionaire, a gifted interloper in a family that had everything but children. The Tatas belong to the Parsi religion, a small, tightly-knit Zoroastrian community, which originates from Persia and found sanctuary centuries ago in India.

Traditionally Parsi priests, the Tata family fortune was started by Jamsetji Tata, who made the company's name by opening a textile mill in 1868. Strikingly, the entrepreneur offered workers pensions and paid accident compensation.

The Tatas slowly built up a formidable business but by 1917 the family was running out of heirs. Naval H Tata, Ratan's father, was born with little else than a famous name: his parents died young, leaving him to be raised at an orphanage.

But Naval was destined to win life's lottery: at 13 he was adopted by the Tata's formidable matriarch, Lady Navajbai Tata, who had been left childless and widowed at 40.

This chance event was to change history. Naval H Tata rose to become deputy chairman of Tata Group. Instead of grinding poverty, Ratan Tata grew up in the lap of luxury at Tata Palace in the centre of Mumbai. Attended to by a retinue of 50 servants, he was driven to school in a Rolls-Royce.

America held a special fascination for the young Ratan Tata, who was born in Mumbai in 1937. He studied architecture at Cornell University and travelled across the country, washing dishes to make ends meet. He took a management course at Harvard.

Ratan Tata admitted falling in love with a young woman in America, making him a reluctant dynast. But the family's dearth of talent saw him summoned back to India.

He only designed two houses: his mother's and his own beach-house off the Arabian sea. His two closest friends, Amar Bose who made billions from audio equipment, and conductor Zubin Mehta, a fellow Mumbai Parsi, remained in the United States.

Once in Tata, the young Ratan rose swiftly, although he complained that his name was more of a burden than a boon. By 1982 he was chairman of Tata Industries and heir apparent, learning at the feet of his uncle Jehangir Ratanji Dadabhoy Tata. Ratan became chairman in March 1991, just as Moscow's Communist empire dissolved.

Gita Piramal, India's leading business historian, said Ratan Tata has never been fully reconciled to being the scion of a family firm. "I have argued with Ratan over this.

"The Tatas are a reconstructed family who adopt and cobble together people to make a family. That way they do promote talent rather than blood relations. Ratan was clearly talented, but he resents the implication."

What marks Tata out is its social conscience. In conversation, Ratan Tata appears moved by fairness not money. He owns less than one per cent of the Tata group, a personal fortune of £300 million. Over two thirds of Tata Group is owned by charitable trusts that finance good causes.

With no children, Ratan Tata is supposed to retire in December 2012, when he reaches 75. That will leave the group with a familiar succession problem. The chairman has always advocated that the best person should get his job. He says "theoretically" his successor does not have even to be an Indian.

The answer probably lies in "reconstructing" the Tata family. The largest shareholder in Tata Group is another Parsi businessman Pallonji Shapoorji Mistry, whose 18 per cent stake is worth £5 billion. His son- in-law, Noel, is also Ratan Tata's half brother.

Raju Narisetti, managing editor of business newspaper Mint, says there is only one choice for the Tatas - another Tata.