Since 24 October, when Tata Sons, the holding company of the Tata Group removed Cyrus Mistry as the group’s chairman, the media has been rife with allegations and counter allegations from both sides.
The Tata-Mistry imbroglio comes just months after Nikesh Arora, the India born chief operating officer of the Japanese technology major Softbank resigned following an investigation into his professional conduct had, in fact, exonerated him.
In times recent and past, India Inc. has seen its fair share of top-level exits. VCCircle looks back at some that made big news.
Rahul Yadav: If there’s one thing common to Apple founder Steve Jobs and the 26-year-old IIT, Bombay dropout Rahul Yadav, it is that both were fired by the boards of the companies they founded. Yadav, the co-founder and CEO of real estate search portal Housing.com, shot to fame when in February 2015, he made it to Forbes magazine’s ‘30 under 30’ list for 2014, after the site reportedly sold more than $8 million worth of properties in a week.
His reign at Housing.com, however, was short lived and by the end of June last year, following a series of controversial statements, a resignation and an apology later, Yadav was fired by the Softbank-backed company’s board, citing his behaviour towards investors, partners and the media for his sacking.
In September last year, Yadav announced his new data analytics venture Intelligent Interfaces, which was reportedly backed by promoters of e-commerce companies like Paytm and Flipkart, mobile phone maker Micromax and YouWeCan, a foundation backed by cricketer Yuvraj Singh. In May it was reported that the venture had fizzled out.
P J Nayak: In April 2009, Axis Bank’s then chairman and CEO Pangal Jayendra Nayak quit just months before his tenure was to end, following the appointment of Shikha Sharma as director and CEO. Nayak had wanted that someone from within the bank take over as the CEO, and was unhappy about Sharma’s appointment. Sharma was managing director and CEO at ICICI Prudential before moving to head Axis Bank.
Nayak, a former career bureaucrat, would go on to become the country head for Morgan Stanley in India, between 2010 and 2013, and later head the Board of Directors of the Union Bank of Colombo in Sri Lanka. In 2014 he also chaired a government panel on banking reforms.
Russi Mody, Ajit Kerkar, Nani Palkhivala and Darbari Seth: Mistry is not the first Tata Group chairman who has had a less than pleasant exit from the Tata Group. Soon after he took over the reigns at India’s largest conglomerate in 1991, Ratan Tata began the task of overhauling the group’s work culture. His uncle J R D Tata had allowed several ‘satraps’ – company heads who virtually controlled their own fiefdoms – to flourish.
Ratan Tata went about changing that and in the process eased at least four bigwigs – Darbari Seth of Tata Chemicals, Russi Mody of Tata Steel, Ajit Kerkar of Indian Hotels and Nani Palkhivala of ACC Ltd – out of the group. While Mody was the first to be ousted in 1993, Seth followed the following year. Kerkar and Palkhivala stepped down in 1997.
Other notable directors that exited the Tata board around the same time were F C Kohli, S R Vakil, A H Tobaccowala, S A Sabavala and K M Chinnappa, who all left in 1997.
Neville Wadia: Nusli Wadia, the chairman of the Wadia Group, which promotes Bombay Dyeing, Britannia Industries and Go Air, among other companies, has been known for his various corporate feuds. His first such fight was against his own father Neville Wadia, who, in 1971 decided to sell Bombay Deying to industrialist R P Goenka. Nusli was opposed to the sale, and dug his heels and with some help from his mother and from J R D Tata (who was then heading the Tata Group), began buying up the company’s shares and even got the unions to join in the fight. He won eventually, and Neville had to give in and scrap the deal. Eventually Nusli took over the business, succeeding his father, and went on to wage several more corporate battles including with the likes of Reliance Industries’ Dhirubhai Ambani. Interestingly, in the Tata-Mistry row, Wadia, an independent director on the board of Tata Chemicals, has taken a stand against the Tatas and is on Mistry’s side.
Rajan Pillai: Nusli Wadia tried buying out biscuit maker Britannia Industries from its US-based parent RJR Nabisco in the late 1980s. In fact, Wadia was introduced to the executives at the US conglomerate by his friend and businessman Rajan Pillai, who was also in-charge of the parent company’s Asia operations. The negotiations between Wadia and Nabisco fell through and Pillai became Britannia’s chairman. Pillai fell out with Wadia, and soon acquired Britannia with the help of French company Danone S.A.. Danone would go on to accuse Pillai of fraud and join his friend turned foe Wadia. A bitter corporate battle ensured and Pillai was ousted. Pillai was later charged by the Singapore government of fraud. He evaded arrest and fled to India in 1995, where he was arrested. Three days after his arrest, Pillai mysteriously died in Delhi’s Tihar Jail.
N M Desai: N M Desai, the then chairman of the engineering giant Larsen & Toubro (L&T) discovered that NRI businessman Manu Chhabria was eyeing a hostile takeover of the company. He approached Reliance Industries Ltd chairman Dhirubhai Ambani to acquire a larger stake, and save the company. Ambani however had plans of his own and in January 1989 replaced Desai, who was forced to step down as the company’s chairman. Ambani was backed by the then Rajiv Gandhi government, which got government-owned financial institutions like the United Trust of India, Life Insurance Corp. and the General Insurance Corp, to back him. In the wake of the Bofors scandal, however, Gandhi lost power and Ambani had to retreat. Eventually, in 2000, Reliance sold its stake to the Aditya Birla Group. Later, another corporate battle would lead to L&T selling its stake in its cement business to Aditya Birla Group.
R S S L N Bhaskarudu: The years 1997 to 1999 were of a significant turmoil at India’s largest carmaker Maruti Suzuki, which was then a joint venture between the Indian government and Suzuki Motor Corp. of Japan. Following differences with Suzuki, the Indian government nominated Bhaskarudu as managing director in August 1997, without consulting Suzuki. This, even as incumbent chairman R C Bhargava was yet to complete his term. Eventually, things came to a breaking point by 1999, and in August of that year, the Atal Behari Vajpayee government asked Bhaskarudu to resign, five months before his term was to end.
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