Tata to Mistry, group’s Ratan returns

Mumbai, October 24

In a sudden and dramatic turn of events, Cyrus Mistry was today sacked as chairman of India’s largest conglomerate Tata Group and replaced by his predecessor Ratan Tata in the interim, triggering a possible confrontation between the single-largest shareholder and the company’s founding family.

Mistry’s family firm Shapoorji Pallonji Group, which has 18.4 per cent stake in Tata Sons — the holding company of $100-billion salt-to-software conglomerate — is believed to be considering fighting out the “illegal” removal.

The board of Tata Sons, where 66 per cent shares are held by philanthropic trusts endowed by members of the Tata family, ousted chairman Mistry, saying it was acting “for the long-term interest” of the firm. No reason was given for removing Mistry, who was brought in less than four years back with much fanfare, but it is believed there were differences over the management style and his approach of selling assets after writing them down.

The board named a five-member search committee, which includes Tata, to choose a successor within four months. The other four members are TVS Group head Venu Srinivasan, Amit Chandra of Bain Capital, former diplomat Ronen Sen and Lord Kumar Bhattacharya. Except Bhattacharya, all are on the board of Tata Sons. 

Mistry, 48, who replaced Tata, 78, as chairman in December 2012, was only the sixth group chairman in nearly 15 decades and the first from outside the Tata family. 

Under Ratan Tata’s chairmanship (1991 to 2012), the Group’s revenue grew from around $6 billion to $100 billion, driven by his expansionist strategy that included overseas purchases like tea maker Tetley in 2000 and luxury car company Jaguar Land Rover in 2008. But out of 100 companies under Tata Sons, only a few were profitable, with Tata Consultancy Services (TCS) and JLR clearly standing out.

Mistry, on the other hand, was looking at tackling mounting debt by raising cash, refinancing loans and selling assets after writing them down. Founded in 1868, Tata Group employs 7 lakh people. — PTI