The appointment of Cyrus Mistry as chairman of Tata Sons in 2012 was a rather impactful manifestation of the influence of the ‘Phantom of the Bombay House’. Mistry’s father, Pallonji Shapoorji, was referred to as the Phantom because of his unobtrusive presence as a director of Tata Sons by virtue of their 18.40 percent stake. Mistry's elevation as chairman transformed the equation, but his acrimonious exit in 2016 brought the Tatas and the Mistrys on a collision course.
The passing away of Cyrus Mistry, just three months after his father’s death, has made it difficult for corporate watchers to understand the future contours of their relationship. Prominent members of the Parsi community and many associated with the Tata group have seen divisions due to the Tata-Mistry spat. Mistry’s exit led to the resignation of several key personnel in Tata who were considered close to him.
The London-educated Mistry was travelling with the Pandoles, another prominent Parsi family of Mumbai, who sided with him. The Pandoles owned Duke and Sons Private Limited which manufactured the hugely popular Mangola among other brands before selling their over-a-century-old business to Pepsi in 1994. The newer generation moved into fresh avenues, but old money camaraderie perhaps formed by their ancestors establishing business concerns in the latter half of the nineteenth century has endured.
Noel Tata, a senior figure in the Tata hierarchy, and who is Ratan Tata’s half-brother, is quoted in Peter Casey’s The Story of Tata as saying that their (his and Ratan Tata’s) father Naval Tata would have not “agreed to an 18.4 percent shareholder being appointed in the first place, but that he would have certainly supported the firing.” Noel Tata is married to Aloo, who is Cyrus Mistry’s sister.
Senior journalist Coomi Kapoor has shone a light upon the close links between the Wadias, Dinshaws, Tatas, Mistrys, forged through marriages and business alliances, that has added layers of complexity to the feud. While there are several theories on why Mistry was unceremoniously shown the door by Ratan Tata, the different styles of functioning were discernible to stakeholders even in the UK, where the Tata group has a major presence.
“We got a feeling that the young Cyrus Mistry was less eager than the elderly Ratan Tata to maintain the scale of the group’s presence in the United Kingdom,” said a prominent person who worked closely to prevent what looked like a hasty exit of the group from the UK's steel sector a few years ago.
Casey and Kapoor both hold that the Mistry family bought shares in the Tata group in the 1960s and 1970s, although intriguingly Casey also writes: “The Mistry and Tata families became inextricably intertwined in 1936, when Cyrus Mistry’s grandfather, Shapoorji Pallonji Mistry, bought 17.5 per cent of Tata Sons, the Tata principal holding company.” But whether it was the 1930s or 1960s when the SP Group bought shares in Tata group, it was only in 1980 that Cyrus Mistry’s father Pallonji Shapoorji was made a director by the legendary J.R.D. Tata, although the latter still had some reservations.
When Ratan Tata replaced JRD as the chairman in 1991, he faced resistance from legendary figures like Russi Mody who had taken Tata Steel to new heights. His father was Sir Homi Mody, a prominent voice for the nascent Indian industry, who was a director in Tata Group for over 20 years from the 1930s onward, and the road where Bombay House is situated is named after him. With JRD’s backing, Russi Mody was sacked as chairman of Tata Steel when he was visiting London.
On September 5, 2011, the selection committee asked Cyrus Mistry a variety of questions. Replying to a query on Tata Sons board he said it needs to be changed “as it is too inbred”. Cyrus Mistry was not flamboyant like Russi Mody, and unlike him, did not have the managerial experience. But the SP group still owns 18.40 percent share in Tata, and unlike Mody, sacking Cyrus Mistry has not severed the family’s link with the conglomerate.
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