Moneycontrol Bureau
Cyrus Pallonji Mistry on Monday earned the dubious distinction of becoming the first Tata Sons Chairman to be publicly dismissed, barely four years after becoming the first non-Tata to occupy the position.
The group statement pointedly mentioned that it had “replaced” Mistry as the chairman, stoking speculation as to the reason for the sudden move. Former Tata Sons Chairman Ratan Tata has been named interim chairman. The decisions were taken at a board meeting in Mumbai.
“The Board in its collective wisdom and on the recommendation of the principal shareholders (Tata Trusts) decided that it may be appropriate to consider a change for the long-term interest of Tata Sons and the Tata Group,” said a Tata group spokesman. Ratan Tata is chairman of the Tata trusts that collectively own 66 percent of Tata Sons.
Interestingly, in an interview to the group’s in-house magazine last month, Mistry had said: "There will always be external influencers and so-called experts, who may be motivated by immediate transactional gains, goading us on to churn our portfolio. It is important that we develop our own prognosis based on knowledge and context, keeping all stakeholders in mind. We should not be afraid of taking tough decisions for the right reasons, with compassion".
This suggests that differences of views between Mistry and the board could have been simmering for a while before culminating in a board room battle today.
The Board has constituted a Selection Committee to choose a new Chairman. The Committee comprises Ratan N Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Lord Kumar Bhattacharyya, as per the criteria in the Articles of Association of Tata Sons. The committee has been mandated to complete the selection process in four months.
Cyrus Mistry was appointed Chairman of Tata Sons on December 28, 2012, taking over from Ratan Tata. His appointment had come as a surprise as it was widely expected that the prestigious mantle would not go to a non-Tata person.
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