The unexpected announcement by the Tata Group to replace Cyrus Mistry on Monday, who had taken over as the head of the $103-billion conglomerate only four years ago, has left many questions in its way. Mistry, chosen as Chairman of Tata Sons in November 2011, has been replaced by his predecessor Ratan Tata as interim chairman, who had retired in 2011. The decision has not only drawn the attention of journalists in India but several international publications as well. Here’s how some of the top financial publications reacted to the news:
Terming the situation a turmoil, Bloomberg saw the move as an end to Cyrus Mistry’s “push to transform Tata Group into a more prudent enterprise than the globetrotter”. It also reported about Tata’s plans to sell its stakes in Indonesian coal mines and also those of selling of its UK operations.
“Tata Group abruptly ousted its chairman of almost four years in a rare display of discord atop India’s biggest conglomerate, casting the specter of a leadership vacuum at the $100 billion coffee-to-steel business empire.”
2. Financial Times:
The Financial Times meanwhile termed the situation as a “clash of cultures” and said that the decision sent shock-waves throughout Indian business circles. It also mentioned Ratan Tata’s concerns “about an erosion of the conglomerate’s ethical culture and long-term principles under his successor”.
“Tata Group, India’s biggest conglomerate, has removed chairman Cyrus Mistry after a “clash of cultures” saw him lose the backing of Ratan Tata, his predecessor and patriarch of the founding family.”
Forbes called the announcement by Tata as an ‘unexpected ouster’ which “sent ripples of shock through India’s corporate establishment”. Forbes also wrote about Tata’s recent additions in the board including the appointments of Ajay Piramal, Venu Srinivasan and Amit Chandra.
“The board of Tata Sons, the holding outfit of India’s $103 billion (revenues) Tata conglomerate, decided today to remove Cyrus Mistry as chairman and appoint former chairman Ratan Tata as its interim boss for four months.”
4. International Business Times:
The International Business Times (IB Times) looked into the background of Cyrus Mistry and how he came to the important position in the company. Quoting Indian Express, IB Times said that that the group had sought legal opinion a month ago on “issues relating to management … He was replaced due to management issues.”
“Mistry, who became the chairman of Tata Group in late 2012 after Ratan Tata stepped down, was the first chairman to be appointed from outside the family in 70 years.”