Cyrus Mistry stands down as Tata Group chairman, Ratan Tata takes over
24 October 2016
The board of Tata Sons has asked Cyrus Mistry to stand down as chairman of the group, about four years after he took over the reins of the over $100 billion salt-to-software conglomerate.
The decision was taken at a meeting of the board of directors at the group headquarters in Mumbai today. The board's decision for a rejig at the top management, however, left CEOs of individual companies unchanged.
The group did not give any reason for the change of leadership but it is believed that Tata Sons was unhappy with Mistry's approach to shedding non-profit businesses, including the conglomerate's steel business in Europe, and concentrating only on cash cows.
The decision comes after a series of business shocks, including the undoing of the UK steel business, the fading of Tata Motors passenger vehicle business and the Docomo debacle, all of which combined to erode the market value of India's best known business group.
Ratan N Tata, chairman emeritus of the Tata Group, has been brought back from retirement to take active role as chairman of Tata Sons, the holding company of the Tata Group, at least until the group finds a replacement for Cyrus Mistry, 48, took over from Ratan Tata as group chairman in December 2012.
Ratan Tata (79) was chairman of the group from 1991 till his retirement on 28 December 2012. He was also chairman of the major Tata companies, including Tata Motors, Tata Steel, Tata Consultancy Services, Tata Power, Tata Global Beverages, Tata Chemicals, Indian Hotels and Tata Teleservices.
During his tenure, the group's revenues grew manifold, totalling over $100 billion in 2011-12.
Cyrus P Mistry, who was managing director of Shapoorji Pallonji Group, was nominated by a high-profile selection committee to take over from Ratan Tata on his retirement in December 2012.
The board of directors of Tata Sons had, at its meeting on 23 November 2011, appointed Mistry as deputy chairman of Tata Sons, to work with Ratan Tata over the next year and take over from him when Tata retired as chairman of the group.
Ratan Tata, who Mistry had replaced on 29 December 2012, has been brought back as interim chairman for four months during which a search committee will look for a replacement.
The Tata Group has appointed a new search committee comprising Ratan Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Lord Kumar Bhattacharyya to look for a new chairman for the group.
The committee has been mandated to complete the selection process in four months.
Cyrus Mistry, who was managing director of Shapoorji Pallonji Group, was also on the board of director of Tata Sons since August 2006. A graduate civil engineering from Imperial College, London, he also has a master of science in management from the London Business School.
Cyrus Mistry had the lead among probables, including Noel Tata, Ratan Tata's half brother and chairman of Trent, the group's retail arm. Noel, the son of Naval Tata and Simone Tata, is married to Aloo Mistry, the daughter of Pallonji Mistry, who is the largest single shareholder in Tata Sons.
Many had expected Noel Tata to take over from Ratan Tata as Tata group chairman.