AGENCY
Mumbai: 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, a development that can trigger a 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 in Tata Sons — the holding company of USD 100- billion salt-to-software conglomerate — is believed to be considering fighting out the “illegal” removal.
In the surprise development, the board of Tata Sons, where 66 per cent shares are held by philanthropic trusts endowed by members of 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 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.
“Tata Sons Board met today and decided to replace him as Chairman with immediate effect. The Tatas Sons board in its collective wisdom and on the recommendation of principal shareholder decided that it may be appropriate to consider a change for the long term interest of Tata Sons and the Tata group,” a Group spokesperson said.
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. He will remain a director of the individual companies, though his tenure as Chairman is the shortest so far at the group.
