Will the house that Jamsetji built with a capital of Rs 21,000 in 1868 continue to retain its values?
Ratan Tata and Cyrus Mistry in Kolkata, August 31, 2012 (Photo: Getty Images)
LET’S START THIS story with the one question everyone asks. How many Parsis are there in India?
The answer is likely to be anything between 50,000 and 60,000. No one knows for sure. Ask the Parsis. They will claim 60,000. Ask the demographers. They are more likely to say anything between 45,000 and 50,000.
In either case, you would imagine such a tiny number being lost among the 1.38 billion Indians today. But no, the Parsis have remained a distinct minority who appear to have excelled in their many endeavours, business or otherwise. One got the Bharat Ratna. Eleven got the Padma Vibhushan, the second highest civilian award. One was India’s first field marshal, one among only two we have had. Another is the father of India’s nuclear programme. One was India’s ambassador to the US; another, attorney general. Rather surprising for a community this small in number.
Between the 2001 and 2011 Censuses, the number of Parsis fell from 69,000 to 57,264. Demographic trends projected that by this year, their population would be down to 23,000. The Parsis have proved that projection wrong but their numbers keep shrinking and, today, a third of them are over 60. Most live in the city of Mumbai, not far from the Gujarat coast where they first landed between the 8th and 10th centuries CE to escape persecution after the Muslim conquest of Persia between 633 and 654CE.
Zoroastrianism was the dominant religion of Persia at the time, or so say historians. The Sasanian Empire ruled there and, to retain their faith after these conquests, many escaped. They initially settled at Hormuz on the Persian Gulf but found it still risky. They then set sail for India, where they first settled in Diu in Kathiawar but soon moved to South Gujarat where they remained for about 800 years as a small agricultural community worshipping Ahura Mazda, Avestan for The Wise Lord.
The French monk Jordanus was the first to write about them in 1322, referring to their presence in Thane and Bharuch. Many foreign travellers to India did so as well. Including the Portuguese physician Garcia de Orta who referred to them as Esparcis, a merchant community. But Herodotus and Xenophon, the two great historians of the 3rd and 4th centuries BCE had already coined the term Parsis by then.
The important thing to remember is that the Parsis are not to be confused with the Iranis, who fled Persia much later, in the 19th and 20th centuries. They are also Zoroastrians. But culturally, linguistically, ethnically and socially very distinct from the Parsis. They are known for the hundreds of Irani cafés that once dotted the city of Bombay, famous for their affordable and distinct cuisine and of course their legendary patisseries.
After the Supreme Court’s verdict, Ratan Tata will now live out his retirement years knowing that his reputation—and the group’s— remain intact
Trade and commerce eventually became the hallmark of the Parsi community. And when Emperor Jehangir signed a trade treaty with James I of England, the East India Company obtained the exclusive rights to reside and build factories in Surat and neighbouring areas. That was when the Parsis started working with (and, on occasion, for) the British and in 1668 when the Company leased the Seven Islands of Bombay from Charles II of England, they moved there, to build the new settlement and occupy positions of power and trust.
They rose speedily to become one of Asia’s most successful mercantile communities. By mid-18th century the brokerage houses of the Bombay Presidency were mostly in Parsi hands. They were the principal merchants and ship owners, and were held in high esteem by the British. Trade between India and China was largely in their hands. Timber, silk, cotton, tea and, yes, of course opium. Vast quantities of opium, say historians, were traded at that time bringing in large sums of money.
And that is when they got land. Precious land that many Parsi families are still large holders of.
Bombay became their main centre of enterprise. Their sharp business acumen and philanthropy was the stuff of legend. By the 19th century, there were 85,000 Parsis in India, of whom 48,507 lived in Bombay itself, constituting 6.7 per cent of the city’s population. They were in the vanguard of progress, had amassed large fortunes, and given away large sums in charity. Most of the trusts and charities of that time were set up by them.
The 40 feet tall, mid-19th century, cast-iron statue of the Khada Parsi, which towers over Byculla today in mid-town Mumbai, stands as a tribute to that spirit of enterprise.
Over the years, the tiny community produced some of the biggest figures in Indian history and politics. Particularly during the early years of the freedom struggle. They founded many businesses which still exist and are prospering. In more recent times, there was Sam Manekshaw, the first field marshal of the Indian armed forces. Zubin Mehta, who has conducted the world’s most famous symphony orchestras and is music director emeritus of the Israel Philharmonic as well as the conductor emeritus of the Los Angeles Philharmonic Orchestra. Famous nuclear physicist Homi Bhabha founded the Tata Institute of Fundamental Research. Freddie Mercury, legendary rock star and lead singer of Queen. Rohinton Mistry, the celebrated Canadian writer of Indian origin. And currently, the man in the news: Adar Poonawalla of the Serum Institute, the world’s biggest vaccine maker.
The Indian Parliament has had several Parsis, including Piloo Mody and Minoo Masani who were the founding fathers of the Swatantra Party, India’s first secular rightwing party. Feroze Gandhi, also a parliamentarian, married Indira Gandhi and was the father of Rajiv and Sanjay. JRD Tata, a Bharat Ratna, founded Air India and was a legend of corporate India, mentor of Ratan Tata, the current doyen of the Tata Group and one of the 11 Padma Vibhushans the community has had since Independence.
The salt-to-software Tata Group is today India’s largest business house with a market capitalisation of Rs 17 lakh crore which surged by 42 per cent during the past year, in the midst of the raging pandemic. Over 150 years old, it is the country’s largest promoter of listed companies and is owned 66 per cent by Tata Trusts, a clutch of philanthropic bodies, with 83-year-old Ratan Tata as its guiding light. He had joined the group in 1961 as a young intern in the Tata Steel factory at Jamshedpur in Bihar, a 224-square kilometre township named after Jamsetji Nusserwanji Tata, the founder of the Tata Group and a Parsi icon of the colonial era.
RATAN TATA LED the group as chairman of Tata Sons for two decades before stepping down in 2012. His successor was appointed by the board: Cyrus Mistry, a 44-year-old Irish businessman of Indian origin, also a Parsi. Mistry belonged to the Shapoorji Pallonji family which had an 18 per cent stake in the group. They were, in effect, the second largest shareholder in Tata Sons.
Mistry’s years in office were not without controversy. Stories kept emerging from Bombay House, the 97-year-old global headquarters of the group, a neoclassical Edwardian structure designed by the legendary Scottish architect George Wittet, who also built the Gateway of India and the Prince of Wales Museum, of new coteries, new power centres that were being formed and old satraps being sidelined. New lines of business were secretly planned. Reports of old businesses being shut down were often in the news. Also in the news were stories about how Mistry was secretly planning to take the group out of its conservative, traditional mould and give it a new identity.
Now identity politics has been a big thing in the group ever since Ratan Tata took charge of the huge conglomerate with its many disparate businesses and gave it a decisive new corporate identity in the late eighties and early nineties. Brand Tata was then created with its new logo that the best group companies could use after paying a royalty that went into the kitty that built and sustained the brand. It was a unique idea, entirely Ratan Tata’s, but created a lot of internal controversy. It also took the Tata brand spiralling to new heights. To get an idea of what impact this strategy had, one must note that last year the brand was valued at $20 billion, which makes it India’s most valuable brand. To tamper with that key asset seemed like sacrilege to most insiders.
This, and other decisions, including ruling by coterie lost Mistry the support of many colleagues and four years later, in October 2016, the board of Tata Sons decided enough was enough and it was time to let Mistry go. On the ground that they had lost confidence in his ability to lead the group. They offered him an opportunity to resign voluntarily. An offer Mistry spurned.
In more recent times, there was Sam Manekshaw, India’s first Field Marshal. Zubin Mehta, who has conducted the world’s most famous symphony orchestras. Nuclear physicist Homi Bhabha. Freddie Mercury, legendary rock star. Rohinton Mistry, the celebrated Canadian writer of Indian origin. And the man in the news: Adar Poonawalla of Serum Institute
Reports say that Nusli Wadia, another Parsi, who in the eighties had fought a long and bitter battle against the Ambanis, who vie with the Tatas for the top slot in Indian business, lent support to Mistry. But the board was firm in its view that Mistry must step down. The Tatas requested the former chairman, Ratan Tata, to return as interim chairman till a successor to Mistry was found. Natarajan Chandrasekaran, who was the head of Tata Consultancy Services (market capitalisation: $170 billion, the world’s most valuable IT company) was named as the new chairman a few months later.
This led to a corporate battle the likes of which neither the tiny Parsi community, nor India’s business fraternity for that matter, had seen before.
While the Tatas claimed they had every right to dismiss an officer they had lost confidence in, Mistry claimed he was targeted in a purge because he wanted to make changes that would have demonstrated the failures of earlier decisions taken, some not in the best interest of the group. The complaints went through a maze of several watchdog bodies, the National Company Law Appellate Tribunal (best known as the NCLAT) and the courts till, a fortnight back, the Supreme Court of India finally delivered its judgment. A judgment everyone was waiting to hear. It brought the curtains down on the biggest boardroom battle ever fought in India, and possibly the most controversial.
The three-judge bench of the Supreme Court led by the Chief Justice of India, SA Bobde, set aside the December 2019 order of the NCLAT that had reinstated Mistry to his post, rejected the entire cornucopia of Mistry’s charges against the group, and upheld the decision of the Tata board to remove him. But not before he had tried to drag the larger-than-life reputation of the Tatas through the mud and made untenable the group’s second largest shareholder’s continuance.
Chairman Emeritus of Tata Trusts, Ratan Tata says it was not a question of winning or losing a case. It was “a validation of the values and ethics that have always been the guiding principles of the group”. Cyrus Mistry claims he would go to bed “with a clear conscience”. Meanwhile, the Tata companies in the stock market got a rousing welcome to the verdict, and Ratan Tata will now live out his retirement years knowing that his reputation—and the group’s—remain intact.
As an analyst pointed out, the Mistry family’s investment, dating back to 1965, works out to under $50 million. It got them over 18 per cent of an empire worth, in today’s terms, $230 billion in the stock markets. But now that the court has upheld the change in Tata Sons’ charter to a private company, the Mistry family’s ability to freely monetise its shareholding is likely to be truncated.
The 40 feet tall, mid-19th century, cast-iron statue of the Khada Parsi, which towers over Byculla, stands as a tribute to the spirit of Parsi enterprise
The Tatas have reportedly generously agreed to buy them out, but only at a fair price. What that fair price will be is anybody’s guess. The Tatas have, say some insiders, offered around Rs 80,000 crore. The Mistry family has demanded more than double that amount. But then, the truth is the Shapoorji Pallonji group is facing what reporters describe as a severe cash crunch which diminishes their negotiating power. And the Tatas need to end the battle and to get back to work. The Supreme Court has clearly stated their work is done. They have no role to play in these negotiations.
The two groups will have to sort this matter out between themselves. After all, it is now only a question of money and India’s tiniest community has never been short on that. Not during the British era. Nor in independent India, where their companies continue to play a major role in the growth of the Indian economy. And the tradition-driven Tata Group, stodgy as it may well appear to be to many, has also changed with the times. This boardroom battle was fought hard and won. And perhaps more important, it sets new norms in the workplace.
While peace reigns once again in Bombay House and a new chairman of Tata Sons, 57-year-old Natarajan Chandrasekaran has occupied the corner office, the concern that remains is whether the Parsi ethic that saw it through 153 years of growth and consolidation will continue to inspire the new leadership into the future. Or will the house that Jamsetji built with an initial capital of Rs 21,000 in 1868, and which the later Tatas—like the legendary JRD and his successor Ratan Tata—steered so artfully into the new era continue to retain the values it was once so famous for? The old Parsi baugs of Bombay are abuzz over this, as the world around them changes.
Cyrus may have gone. But without the Tatas, will the Tatas remain the same?