Cyrus Mistry ousted, Ratan Tata returns as interim Chairman of Tata Sons
In a dramatic development that took the corporates and others by surprise, Cyrus Mistry was on Monday sacked as Chairman of Tata Sons and was replaced by Ratan Tata.
Tata chairman Ratan Tata and Cyrus Mistry at the Tata power annual general meeting at Birla Matoshri Mumbai (Source: Express photo by Pradeep Kocharekar)
The surprise announcement came after the Board of Tata Sons met in Mumbai and decided to replace 48-year-old Mistry and appoint Ratan Tata, 78, as interim head.
Ratan Tata (L) with Cyrus Mistry(Source: PTI Photo)
The board named a five-member search committee, which includes Tata, to choose a successor to Mistry within four months.
Ratan Tata (L) with Cyrus Mistry.(Source: PTI Photo )
Mistry was chosen as Tata's successor in November, 2011, and was appointed Deputy Chairman of Tata Sons, whose board he had entered in 2006. He was made chairman on the basis of his representation from Shapoorji Palonji, the largest shareholder in Tata Sons.
"Ratan Naval Tata, Chairman of Tata Sons along with Cyrus Mistry at the Auto Expoat Pragati Maidan(Source: Express photo by Oinam Anand)
There were no reasons given for the change of leadership of the man who was brought in with much fanfare but it is believed that Tata Sons was unhappy with Mistry's approach of shedding non-profit businesses, including the conglomerate's steel business in Europe, and concentrating only on cash cows.
Tata chairman Ratan Tata, Cyrus Mistry (Source: Express photo by Pradeep Kocharekar)
"Tata Sons today announced its board has replaced Mr Cyrus P Mistry as Chairman of Tata Sons. The decision was taken at a board meeting held here today," a Tata Sons statement said.Tata Sons is the main holding company of the group. CEOs at the operating company level of the group have not been touched in the rejig, company sources said.
Ratan Tata (L) with Cyrus Mistry. (Source: PTI Photo)
The board constituted a selection committee comprising Tata, TVS Group head Venu Srinivasan, Amit Chandra of Bain Capital, former diplomat Ronen Sen and Lord Kumar Bhattacharya. All of them, except Bhattacharya, are on the board of Tata Sons.
Ratan Tata, Cyrus Mistry on their way to attend the Tata power agm at Birla Matoshri Mumbai (Source: Express photo by Pradeep Kocharekar)
"The committee has been mandated to complete the selection process in four months," it added. Under Ratan Tata's chairmanship spanning over two decades (1991 to 2012), the Group's revenue grew from around USD 6 billion to USD 100 billion, driven by his expansionist strategy that included overseas purchases like tea maker Tetley in 2000 and luxury car company Jaguar Land Rover (JLR) in 2008.
Ratan Tata and Cyrus Mistry attend the launch of a new website for tech superstore Croma, managed by Infiniti Retail, a part of the Tata Group, in Mumbai,April 23, 2012. (Source: REUTERS/Vivek Prakash/File Photo)
But out of 100 companies under Tata Sons, only a few were profitable, with Tata Consultancy Services (TCS) and JLR clearly standing out. Tata Steel, which bought Corus Group Plc in 2007, has been cutting operations in the UK since the 2008 global financial crisis.
"N Chandrasekaran, MD & CEO, TCS, Ratan Tata, chairman, Tata Sons, S Ramadurai and Cyrus Mistry at the TCS AGM in Mumbai (Source: Express photo by Vasant Prabhu)
Mistry, on the other hand, was looking at tackling mounting debt by raising cash, refinancing loans and selling assets after writing them down. He was chosen as Tata's successor in November 2011, and was appointed Deputy Chairman of Tata Sons, whose board he had entered in 2006. He became chairman in December 2012 on the basis of his representation from Shapoorji Palonji, the largest shareholder in Tata Sons.
"Mr. Ratan Tata, Chairman, Tata son's launch the Cromaretail.com, also is seen Mr.Cyrus Mistry and Mr. Ajit Joshi at Taj Mahal , Colaba. (Source: Express photo by Pradeep Kochrekar)
An engineer from the Imperial College of Science, Technology and Medicine in London, Mistry began working for the group controlled by his father, billionaire Shapoorji Pallonji Mistry, in 1991.
"Ratan Naval Tata, Chairman of Tata Sons along with Cyrus Mistry (who succeeded him in December 2012) launched a new variety of a car at the Auto Expo at Pragati Maidan" (Source: Express photo by Oinam Anand)