The terrorist attack on the Taj Mahal Palace hotel in Mumbai struck one of the city’s iconic landmarks. It also hit one of the country’s most successful business empires—the hotel’s owner, Tata Group, which has suffered a series of setbacks.
Plunging car sales in India are hurting Tata Motors Ltd., which faces questions from analysts about the wisdom of its June 2008 acquisition of the Jaguar and Rover brands for $2.4 billion. Tata Steel Ltd., expanded with the $12 billion purchase of the Anglo-Dutch Caruso Group Ltd. in 2007, is being roiled by slower global growth and plunging metals prices. Group Chairman Ratan Tata underestimated the financial crisis, says Juergen Maier, who oversees Asian and Russian investments at Raiffeisen Capital Management in Vienna.
Still, the opulent hotel itself—opened 105 years ago by Ratan Tata’s great-grandfather—is a reminder of the resilience of Tata Group, which was founded under the British, grew when India’s economy was state controlled and has emerged in recent years as a global competitor to be reckoned with.
THAILAND’S POLITICS has long been a sideshow for companies and investors, as 27 prime ministers have come and gone in the country’s 76 years as a constitutional monarchy. That changed with the eight-day seizure starting in late November of Bangkok’s airports by anti-government protesters, which roiled the economy. The demonstrators had occupied the prime minister’s office for months before that, to little effect.
“They could camp out in Government House for five years and nobody would really notice,” says Christopher Bruton, a director at Bangkok-based Dataconsult Ltd., a firm that does market research for companies investing in Southeast Asia. “But camp out in the airport and you get noticed pretty quickly.”
Thailand’s Constitutional Court on Dec. 2 pushed the target of the protests, Prime Minister Somchai Wongsawat, out of office, easing the crisis, for now. Two weeks later, Abhisit Vejjajiva was elected by lawmakers as the fourth prime minister in a year and gained the ceremonial endorsement of King Bhumibol Adulyadej. Thais are bracing for a more difficult transition, though. The king, a stabilizing force through his six decades on the throne, is 81 years old. His succession may prove a greater challenge than any change in prime minister.