Tata Sons Sacks Cyrus Mistry as Chairman
In a surprise move, Tata Sons, the holding company of the Tata group, has decided to replace Cyrus Mistry and bring Ratan Tata back as interim chairman. Cyrus Mistry is the son of Tata Sons’ single-largest shareholder, Pallonji Mistry.
There’s big churn underway at Bombay House, the headquarters of the Tata Group.
Cyrus Mistry, who took over from Ratan Tata as chairman of the holding company, Tata Sons, in December 2012, has been replaced. The decision was taken at a board meeting today.
Ratan Tata comes back as interim chairman, and in the next four months, a search panel will appoint a new chairman.
Cyrus Mistry is the younger son of Pallonji Mistry, whose family is the single-largest shareholder of Tata Sons. Pallonji Mistry is an Irish citizen.
The reasons for Cyrus Mistry’s sudden departure have not been made known. Corporate leaders such as Harsh Mariwala of Marico have called it a “total surprise”.
The Economist magazine recently described Cyrus Mistry as “the most important industrialist” in both India and Britain because of Tata group’s ownership of Jaguar Land Rover and Corus steel.
Cyrus Mistry’s departure may be due to the slow turnaround in some trouble businesses as the Corus steel unit in the UK and even the domestic passenger car business.
The Tatas also had a bitter and expensive separation with their Japanese partner DoCoMo. A 1.2 billion dollar arbitration order went against the Tatas and in favour of DoCoMo.
According to a press release from Tata Sons, the replacement has been made to ensure long-term interest of Tata Sons and Tata Group. The release adds the board took the decision based on collective wisdom of its members.