Moral Minefield
Has Tata Steel, one of India’s oldest and most-admired corporates, diverged from the ethical path laid down by its founding fathers?
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IN 2007, EXACTLY A CENTURY after the company was founded with almost defiant Indian pride during British rule, Tata Steel took over the Anglo-Dutch steel manufacturer Corus. In his book, The Romance of Tata Steel, published later that year, the most prolific chronicler of the House of Tata, RM Lala, described the felicitous timing of the takeover:
The hand of history has woven the tapestry of the Tatas. Just over a hundred years ago, Jamsetji Tata requested the Secretary of State, Lord George Hamilton, for the co-operation of the British Raj in starting India’s first steel works. On the hundredth anniversary of the registration of Tata Iron & Steel Company, the company won the bid to purchase the Anglo-Dutch steel giant CORUS. And so the wheel has turned a full circle.
The multi-billion dollar deal was signed after months of fierce competition between Tata and a rival bidder, the Brazilian steelmaker Companhia Siderúrgica Nacional (CSN)—and the outcome did suggest a certain good fortune for the Tatas. At a final auction held in London on 30 January 2007, Tata raised its offer in the ninth and last round of bidding to 608 pence per share—narrowly edging out CSN’s final price of 603 pence. The takeover—an all-cash deal—cost Tata Steel $12.1 billion, almost double the $7.6 billion it had first offered for Corus in October 2006.