In a surprising turn of events, Tata Sons "replaced" chairman Cyrus Pallonji Mistry, bringing in Ratan Tata who will be the interim chairman for four months. The unprecedented board room change came with no reasons in particular. Tata, 75, who retired in 2011, will now be back at the Bombay House until the next chairman is appointed.
"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 statement issued by the company read. It is believed that the company was unhappy with Mistry's approach of shedding non-profit businesses, including the conglomerate's steel business in Europe, and only concentrating on cash-making offers.
In a dramatic development that took the corporates and others by surprise, Cyrus Mistry was on Monday sacked as chairman of Tata Sons. He was replaced by Ratan Tata, who will be the interim chairman for four months. The announcement came after the board of Tata Sons met here and decided to replace 48-year-old Mistry, who had taken over from Ratan Tata in 2011.
The board named a five-member search committee, which includes Tata, to choose a successor to Mistry within four months. 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. At the board meeting, six out of eight members present, voted in favour of removing Mistry, said a Tata official. 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. The statement said that "the committee has been mandated to complete the selection process in four months."
Tata officials said ties between Mistry and the Tata Sons board were strained since a "couple of years". There were several issues where the two sides differed, including on leadership and on the approach towards some of the huge investments made in the past. Mistry had taken over to succeed Ratan, after which, he has had to face several challenging situations such as the Tata Steel UK crisis, and the Group's legal battle with Japan's Docomo- over the split of their telecom joint venture Tata Docomo.
