The ugly battle between Ratan Tata, incumbent chairman of Tata Sons Ltd, the holding company of the salt to automobiles conglomerate (annual revenue: Rs.726,000 crore) and Cyrus Mistry, until recently chairman of the company who was ousted in a Tata-orchestrated boardroom coup in October, has transformed into a prolonged war. On December 20, Mistry filed a complaint with the National Company Law Tribunal (NCLT) alleging oppression of minority shareholders — Mistry’s family-controlled company Shapoorji Pallonji Pvt. Ltd owns 18.5 percent of the equity of Tata Sons, while Tata trusts own 66 percent. 

Mistry, who was appointed chairman of Tata Sons in 2012 after a reported global search, has a strong case. Although Ratan has won over the shareholders of Tata Sons and all major companies of the group with lachrymose lamentations and a spate of unsubstantiated charges of mismanagement against Mistry, the plain truth is that by ignoring established tradition and retaining chairmanship of the Tata trusts, Ratan, who retired at the mandatory age of 75 four years ago, clearly intended to remain de facto chairman of the Tata Group, including Tata Sons. Therefore, when Mistry who was mealy-mouthedly advised by his predecessor to “be his own man”, set about correcting his (Ratan’s) bloomers such as the disastrous over-priced acquisition of the UK-based Corus Steel, unravelling the Tata Docomo tangle and rescinding contracts awarded to Ratan’s pal Melhi Mistry (no relation) by Tata companies, Ratan orchestrated a clandestine coup against his elaborately chosen successor. Now evidence of Tata’s whimsical style of decision-making, abuse of office and nepotism is about to be presented to NCLT. 

Time up for this over-hyped tycoon, about to be outed for being too clever by half for his own good. 

Troubled ghost 

In his engaging new compendium Democrats & Dissenters, historian, sociologist, polymath Ramachandra Guha laments the conspicuous drought of right-wing intellectuals who could be a useful counterpoint to liberals and particularly Left intellectuals, poseurs and pundits who dominate the Indian academy, media and public discourse. But he conveniently overlooks the inconvenient truth that the left-liberal priviligentsia who captured the commanding heights of post-independence India’s academy, stridently blocked the entry of Right intellectuals into academia to study and research free market economics, shouting down even mildly pro-free enterprise liberals. Your editor experienced Left intolerance and ridicule as founder-editor of Business India (estb.1978) and Businessworld (1981) which — although none will admit it — prepared public opinion to accept the historic liberalisation and deregulation of the Indian economy in 1991. 

However early last year, Swarajya, a right-wing journal originally launched by C. Rajagopalachari (‘Rajaji’), a stalwart of the freedom movement who was quick to discern that inorganic Nehruvian socialism spelt disaster for free India, and broke with Master Joe in the 1960s to form the Swatantra party which inter alia highlighted India’s entrepreneurial traditions, was re-launched from Bangalore. Unfortunately, despite being edited by reputed journalists R. Jaganathan (my successor at Businessworld) and Sandipan Deb, and boasting a high-powered advisory board including former Citibank CEO Jaitirth (‘Jerry’) Rao and Manish Sabhharwal (Teamlease), Swarajya, with its pedestrian design and layout and stodgy opinion columns, far from popularising free markets ideology, seems headed for early demise and oblivion. 

Neither editor seems ready to lead from the front and none of the advisory board members seem willing to put pen to paper. This half-hearted journal which has claimed Rajaji’s legacy, must surely be troubling his ghost. 

Falling treehouse

Mysterious shenanigans and mischief are afoot in the Mumbai-based Tree House Education and Accessories Ltd (THEAL, estb.2003), a company listed on the National Stock Exchange and a major preschool education provider with 720 nurseries across the country. Several Tree House schools countrywide have suddenly downed shutters with teachers’ salaries unpaid, and an imminent merger with the Kidzee preschools chain promoted by packaging, entertainment and education tycoon Subhash Chandra, has gone bust. Meanwhile THEAL’s promoter-managing director Rajesh Bhatia is incommunicado. 

On the basis of impressive numbers in THEAL’s books in September 2015, Zee Learn Ltd which owns Kidzee which claims to be the largest preschools chain in Asia, signed a merger deal with the company three months later. At that time THEAL’s cash and cash equivalent reserves were a healthy Rs.129 crore. Six months later they drooped to Rs.22 crore. Likewise, revenue growth plunged by 46 percent in fiscal 2015-16. There’s more. In fiscal 2015-16, the company purchased furniture valued at Rs.179 crore, a single year expense greater than all previous years combined. Unsurprisingly THEAL’s net profit plunged to Rs.6.7 crore in 2015-16 from Rs.61 crore in the previous year. Which also means that the Rs.3.45 lakh the company owes to EducationWorld for advertising services rendered, could well become an NPA (non-performing asset). 

These baffling numbers have drawn widespread criticism even as the market value of the company’s equity share has plunged to Rs.15.85 (December 27) from a 52-week high of Rs.245. Moreover on a wider canvas, Bhatia’s financial shenanigans is bad news for the country’s estimated 300,000 private preschools which are currently free of government control. Left academics and NGOs, unmindful of the pitiful condition of the 1.34 million government anganwadis — nutrition centres for new-borns and lactating mothers which are also mandated to provide early childhood education to children of poor households — pressing for government control of private preschools, are likely to get new ammunition.