It is perhaps in Nusli Wadia’s genes to put up a fierce fight when it comes to the crunch. After all, that is how his maternal grandfather, Muhammad Ali Jinnah, carved out a whole new country, Pakistan, in 1947. It could also stem from the fact that the chairman of the Mumbai-based $2.5-billion Wadia group hates being wronged.
Once described as “the epitome of South Bombay’s old money and genteel respectability,” Wadia today lords over an empire that includes textile company Bombay Dyeing, consumer goods maker Britannia, and airline company GoAir.
And today, at 72, this samurai of corporate India is once again bracing for battle, this time positioned against his childhood friend Ratan Tata and India’s largest conglomerate, the 148-year-old Tata Group.
It all began last week when, as an independent director with a number of Tata Group companies, Wadia extended his support to Cyrus Mistry, the deposed chairman of the conglomerate. Mistry was booted out a few weeks ago due to numerous reasons, including his alleged inability to generate adequate profits and his “devious” plan to wrest control of the group from Tata Sons, its holding company.
Since then, the Tata Group and Mistry have been engaged in bitter mudslinging. Mistry has refused to relinquish the chairmanship of many group companies and has found support from several independent directors, including Wadia. The Tatas have moved legally and are now looking to oust both Wadia and Mistry.
As the drama unfolds further, there will be much at stake for Wadia: his personal relationship with Ratan Tata, whom he has helped over the past two decades – Tata was on the board of Bombay Dyeing for 33 years – and his relationship with the $103-billion Tata Group whose former chairman, JRD Tata, was his godfather.
Corporate samurai
Wadia started out fighting his own father, Neville Wadia.
Set up in 1879, the famed Bombay Dyeing is one of India’s oldest textile-makers and became a household name by the 1970s. In 1971, Wadia senior decided to settle abroad and sell the company to Kolkata-based businessman, RP Goenka, owner of the prominent tyre company CEAT Limited. This decision was taken in concurrence with Cyrus Mistry’s father Pallonji Mistry who then held a 7% stake in the Wadia company.
The younger Wadia would have none of it, though. “I don’t want to be a second-class citizen in some European country,” he is reported to have told his father. “I am going to live in India. And I am going to run Bombay Dyeing.” Wadia’s lawyers had also told him that his father didn’t have the right to unilaterally sell the family’s stake.
Educated at Rugby School in England, a 19-year-old Wadia returned to India in the mid-1960s after spending 11 years abroad. He joined Bombay Dyeing as an apprentice on a monthly salary of Rs 180 before undergoing its executive training course. He became the joint managing director in 1970.
Wadia managed to acquire 11% of the company’s shares. In this, he was helped by his mother –Jinnah’s daughter Dina married Neville in spite of her father’s disapproval and remained in India even after he founded Pakistan – and JRD Tata, the then chairman of Tata Group.
The childless JRD Tata had taken a particular liking to Wadia. On his part, the young man considered JRD Tata his mentor. Such was the warmth between them that Wadia even named his younger son Jeh, after the Tata Group patriarch. Evidently, this warmth was missing between JRD Tata and Pallonji Mistry who held an 18% stake in the Tata Group, too. This helped Wadia’s cause.
Meanwhile, Wadia had persuaded the company’s employees, too, to pitch in with their savings.
With Bombay Dyeing in his kitty, Wadia was now ready for more battles. These included those against tycoons such as Reliance Industries’ Dhirubhai Ambani and the Britannia group’s Rajan Pillai, among others.
The decades-long war with Ambani
Wadia’s clash with Ambani to control the country’s textile industry was one of the most ferocious in the history of corporate India. It was widely perceived as one between an ancient regime and the nouveau riche.
The Wadias, after all, were one of India’s wealthiest and most established business families of the time. The group started out in 1736 when Lovji Nusserwanjee Wadia, a Surat-based businessman widely considered as the father of the Indian shipping industry, set up a marine construction company that built 355 ships, including the first one built for the British navy outside England.
By the late 1970s and early 1980s, however, Bombay Dyeing had come under serious threat from RIL, led by Ambani, then a young and upcoming textile baron.
Wadia had the licence to import dimethyl-terephthalate to make polyester while Ambani had one for purified terephthalic acid. Both are key ingredients in the production of polyester. Ambani emerged victorious by allegedly persuading the government to hike duties on chemicals used to make dimethyl-terephthalate. A badly hit Bombay Dyeing had to shut down its plant in 1986.
Not willing to give up, Wadia allegedly used his newspaper-baron friend Ramnath Goenka’s publication to accuse Ambani of manipulating government policies.
“To some extent, yes (I did miss the bus), but that’s because I chose not to manipulate the system… I want to live by a set of values that is integral to anything that we do,” Wadia said in 2012. “All the policies related to polyester and the polyester chain during the 80s were manipulated. You had to manage the system for all licences.”
The war continues
In the early 1990s, Wadia was called upon by JRD Tata to be his heir-apparent at the Tata Group, which Nusli refused. Instead, he helped Ratan Tata ease into his new role. Together, the duo ensured the ouster of the Tata Group old guard that was revolting against Ratan Tata’s appointment. “I was helping someone who has been my friend from the age of three,” Wadia reportedly said back then.
Around this time, another front was opening up for what is today the jewel in his group’s crown: biscuit-maker Britannia Industries.
Set up in 1892 in Kolkata, Britannia sold biscuits to the British army even during the World War. By 1993, Kerala-based cashew businessman Rajan Pillai owned a 38%-stake in it. Pillai later brought in a French partner, Danone.
However, Danone turned wary of Pillai, suspecting that it was being betrayed. With Wadia’s help, Pillai was forced to give up control; Pillai then fled to Singapore following allegations of defrauding Britannia. In 2009, Danone, too, sold its stake after Wadia dragged the company to court for allegedly violating a non-compete clause. Britannia also accused Danone of intellectual property violation over the Tiger brand of biscuits.
But that’s not all.
In 2000, Wadia thwarted an attempt at a hostile takeover of Bombay Dyeing by Kolkata-based jute businessman, Arun Bajoria. He is also fighting Mumbai-based real estate firm Raheja group over a Rs 24,000-crore property in the city.
Today, as he heads for another clash, Wadia must apply all the skills of the corporate samurai that he is. The war may not be anything like before. But if there is anything that these years have taught him, it will be that he isn’t going to accept anything that would challenge his destiny.
This article first appeared on Quartz.