In a dramatic development that took the corporates and others by surprise, Cyrus Mistry was today replaced as the Chairman of the company by former chief Ratan Tata. He will now challenge his ouster from the company in the Bombay High Court.
However, Tata, 78, will helm the $100 billion conglomerate for four months while a selection committee will search for a successor to 48-year-old Mistry, the company said in a statement.
The specially constituted search panel will include Ratan Tata besides Venu Srinivasan, Amit Chandra, Ronen Sen and Lord Kumar Bhattacharyya, as per the criteria in the Articles of Association of Tata Sons. All of them, except Bhattacharya, are on the board of Tata Sons.
Mistry, who had been with the group since 2006 in various capacities, hails from the Shapoorji Pallonji family, which is the largest private shareholder of Tata Sons.
According to a report in The Economic Times, his ouster hasn't gone down well with Shapoorji and Pallonji Group. Dubbing it as illegal, the Group will challenge the move by Tata Sons.
There were no reasons given for the change of leadership of the man who was brought in with much fanfare but 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 today announced its board has replaced Mr Cyrus P Mistry as Chairman of Tata Sons. The decision was taken at a board meeting held today," a Tata Sons statement said.
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 committee has been mandated to complete the selection process in four months," it added.
Mistry, in 2012, succeeded Ratan Tata as the sixth Chairman of the company. Tata hung up his boots after a 50-year run.
Before taking over, Mistry was groomed for the assignment by Tata for a year.
Mistry, who had been with the group since 2006 in various capacities, hails from the Shapoorji Pallonji family, which is the largest private shareholder of Tata Sons.
Tata Sons is the promoter of the major operating Tata companies and holds significant shareholdings in these firms. About 66 per cent of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family.
It owns the Tata name and several Tata trademarks, which are registered in India and around the world.
