File photo of Ratan Tata (L) with Cyrus Mistry. PTI 24 Oct 2016 | 9:34 PM
MUMBAI: In a surprise development, the Tata Sons board on Monday replaced Cyrus Mistry as its chairman, nearly four years after he took over the reins of the over $100 billion salt-to-software conglomerate. Ratan Tata, from whom Cyrus Mistry took over the position on December 29, 2012, has been named interim chairman of the company[ + read story ]
Mumbai, October 24
In a dramatic development that took corporates and others by surprise, Cyrus Mistry was on Monday sacked as chairman of Tata Sons and was replaced by Ratan Tata, from whom he had taken over the reins of the over $100 billion salt-to-software conglomerate four years ago.
The surprise announcement came after the board of Tata Sons met here and decided to replace 48-year-old Mistry and appoint Ratan Tata, 78, as interim head.
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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.
“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 Tata Sons statement said.
"The company's board and the principal shareholders in its collective wisdom took this decision, which they thought may be appropriate in the long term interest of Tata Sons and the Tata Group," the company spokesperson said.
"There is no change in the CEOs at the operating level," the spokesperson added.
However, it is believed that Tata Sons was unhappy with Mistry’s approach of shedding non-profit businesses, including the conglomerate’s steel business in Europe, and concentrating only on cash cows.
Tata Sons is the main holding company of the group.
CEOs at the operating company level of the group have not been touched in the rejig, company sources said.
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. All of them, except Bhattacharya, are on the board of Tata Sons.
“The committee has been mandated to complete the selection process in four months,” it added.
Tata wrote to employees stating he agreed to take up the role of interim Chairman in the interest of stability and reassurance to the group.
In a letter, Tata, who became chairman emeritus of the group when he retired on December 29, 2012, said: " A new management structure is being put in place and a selection has been constituted to identify the next Chairman of Tata Sons".
"The committee has been mandated to complete the process in four months. In the interim, the board has requested me to perform the role of Chairman and I have agree to do so in the interest of stability of and reassurance to the Tata group."
Before he hung up his boots nearly four ago, Tata had led the salt-to-software conglomerate for 21 years after being chosen successor by his uncle JRD Tata in 1991. — PTI
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