Turmoil in Tata Group not good for Indian business: Adi Godrej

Speaking to CNBC-TV18 Adi Godrej, Chairman of the Godrej Group, said the latest turmoil in Tata Group is not good for Indian business. “I am saddened by what has happened and I have known Cyrus Mistry and I have found him to be a person of integrity and character.” Elaborating on his point, he said it is neither good for Tata’s reputation nor is it good for the Indian businesses. There are better ways of sorting out differences than the way it seems to be heading.Below is the verbatim transcript of Adi Godrej’s interview to Latha Venkatesh and Kritika Saxena on CNBC-TV18.Latha: Your opinion on the way in which the events have panned out in Tata Sons itself, it now looks like Pallonji versus Tata Trust?A: I am quite saddened to see something like this happen at India\\'s most renowned business group. It is not good for Indian business and there are better way of sorting out differences. So, I am quite saddened with what has happened and I have of course known Cyrus most of his life and always found him to be a person of integrity and character.Latha: Would you say that the seeds of this conflict is because for the first time the Chairman of Tata Sons was not the Chairman of the Tata Trusts and therefore this conflict?A: That is a possibility, it is difficult to tell and that can always give rise to problems but I am not privy to exactly why these things have happened but I am very sad that it has happened. It is not good for corporate India and it is not good for one of India's most renowned business group.Latha: Knowing as you do the inmates of Bombay House and the top echelons of the Tata Group companies do you think this might now start impacting the group companies?A: It is possible. I hope not because they are companies which are very important to the Indian economy but it is overall quite sad and let us see how it progresses and you just mentioned on the TV I heard that this is going into legal ramifications.Latha: Do you see a resolution at all or have things reached a point of no return?A: Doesn't look like it. I don't think, they have taken steps where I don't think there will be resolution unless there are legal interventions.Kritika: A very quick word. Ratan Tata has today tried to assure CEOs that it will be business as usual, that nothing really changes but if you had read the words do you think it will offer a sense of conciliation in a way to CEOs, will it really soothe frayed nerves or will there be uncertainty for the CEOs of group companies?A: I think there will be uncertainty because it is very difficult to see a chairman who has been in the office for four years suddenly being out of the picture and a chairman who was there four years ago suddenly coming into the picture. This is very unusual and very difficult to put through.Latha: What is your sense about whether the Tata Group will now be what it was? For 150 or 100 years it was this integrated group. Now do you think that we are going to see bits and pieces of the group and therefore not any more the premier Indian conglomerate?A: That is difficult to tell but clearly the great reputation will be damaged to my mind.Latha: How do foreign investors or onlookers outsider to the Indian scene look at our corporate structure itself in the developing world or the emerging market, there aren’t very big standards of sanctity of contract and state of the art corporate governance standards. The Tata Group and a few group like yours were the few family run groups but still had professionalism, do you think that image takes a dent?A: Maybe not, because the Tata Group is rather unusual that the main promoter is a trust or a combination of trust that is a little unusual most groups have trust, but they are not majority shareholders in the principal holding company as in the Tata Group.Latha: How well do you know the problems that were festering, did you get a sense that Mr Tata couldn’t let go or do you think that he couldn’t suffer a change in style?A: It is difficult to tell. I was not privy to such details, but clearly I regret that this has happened. I think it is not good for either Tata’s reputation or for Indian business generally.Latha: A word of advice for all parties concerned?A: I think there are better ways of sorting out differences then the way this seems to be headed.Latha: If you had to pick successors what would your list look like?A: It is difficult. I have not given a thought.Kritika: Don’t you think it will be a concern for successor. Hypothetically, if you were to look at taking over something of this sort, aren’t the ghost too dark to actually think of coming on as a successor now?A: I would imagine, because I think even Cyrus when he took over he was part of the selection committee for a successor and then they went to him and people were also surprised that he was appointed the successor, when this sort of a thing happens I think it will be difficult for a potential successor.Latha: Considering that his sister is married to Noel Tata, the two families must have known each other very well. In spite of it things didn’t work out, now names that are circulating are names like Indra Nooyi if you can’t agree with someone whom you know so well. Do you think an outsider will dare take that seat?A: As I mentioned there would obviously be difficulties.Transcript to follow...