TATA Sons are the biggest business barons in India. But they are not in the list of Forbes billionaires list. I am surprised about this finding of mine. I was looking into the Forbes Billionaires list the other day and the best of business barons were in the list. Most of them made piles of money with their Technology business and rest of them inherited. TATA is the biggest brand and most trusted brand in India. They were into business from a very long time.
TATA Sons are into every other business. They are in all possible sectors in the world. They are the best business managers around in the world. Here is the list of businesses that they are into. TATA Group is running 96 businesses and out of which 28 Companies are publicly listed on the various stock exchanges. TATA Group is world’s top 50 Group according to Market capitalization and Reputation. Now the important question: Why is Ratan Tata’s name does not figure in the Billionaire’s list? How come the other clans of TATA are not in the picture? Does not it sound little weird? I find it very weird. It is confusing even.
The reason is that, TATA Group’s 96 companies are held by its main company “TATA Sons” and the main owner of this TATA Sons is not Ratan TATA but various charitable organizations developed and run by TATA Group. Out of which JRD TATA Trust & Sir Ratan TATA Trust are the main owners, they own 65% of TATA Sons which is the key holding company of the other 96 TATA Group Companies. So this 65% ownership ownership of TATA Sons Limited is not reflected on Ratan TATA’s personal Financial Statement but on the various charitable organizations and this is the reason why Ratan Tata is not in the list of Billionaire club.
Now isn’t this interesting for you? It definitely is for me. Why charitable trust does own a company? Is it good or bad? Was it intentional? I don’t doubt the charity work or the trust that does good deeds by the company but what is the whole purpose of doing all this? Just confusing isn’t it? This is what TATA could have done best to their sons. He has carefully planned his move and it is one of the master strokes I guess. Is it baffling?
Here are my reasons: The future generations just control the wealth but they don’t own it. in this way, they are just safe guarding and growing and enjoying the wealth. Isn’t it that all we want? (Naah.. A typical middle class guy won’t agree for such a deal, he prefers to own and pay taxes than being a controller.)
When you control your holdings than owning you have got more power and less leverage. This is one of the methods the mega rich practice. They don’t own anything on paper but they control everything and that is best way to lead life.
They don’t own the business and it is owned by a charitable trust. When charity comes into picture, there is nothing called tax. This is how intelligent people safeguard their wealth. They safeguard from the government and just control it.
There are many more reasons, which I’ll leave it to you to figure out.