Cyrus Mistry was appointed as the sixth chairman of the behemoth Tata Group in 2012, replacing Ratan Tata. He had been director of the company since 2006. He himself became a surprised element; to not only see his tenure cut short abruptly, but also to see that his tenure has been the shortest at the conglomerate. He was the part of the panel that was tasked to find a successor to Ratan Tata for heading the $100billion+ Tata group.
Achievements And Journey of Cyrus Mistry
In an approximate period of four years, he took over the reins of the salt-to-software conglomerate; Cyrus Mistry had to face many challenges in the domestic as well as global markets. The main reason for these difficulties is speculated that many of the group companies faced headwinds. He continued to walk on the same path as a successor in terms of divesting assets. He is the only second non- Tata to take charge of the Tata group, after Nowroji Saklatvala. Mistry came in with a lot of promises, especially of continuity when he became chairman. When Mistry took over, the Tata Group had revenue of $100.09 billion in 2011-12. Since then, the group’s revenue grew to $103 billion in 2015-16.In July, Tata group’s hospitality firm Indian Company Ltd(IHCL), which runs Taj group of hotels, completed the sale of Taj hotel for $125 million (an approximate value of 839 crore). The hospitality firm had also sold off 12.7 lakh shares of Belmond for a consideration of $11.96 million. IHCL had also sold BLUE Sydney, a Taj Hotel, to Australia Hotels Properties Ltd for AUD 32 million (nearly 179 crore) in the year 2014. Mistry belongs to Shapoorji Pallonji, which is the single largest shareholder in Tata Sons with 18.4 per cent stake.
Speculated Reasons For The Sacking
The announcement of this news came after the board of Tata Sons met here and decided to replace 48-year-old Mistry, who had taken over from Ratan Tata in 2011. The sudden removal of Mistry, who was brought in with so much fanfare, has left each and everyone surprised. While the reasons for Mistry’s sacking by the Tata Sons board remain unknown, sources say that this decision was taken on the suggestion of Tata Trusts. These philanthropic trusts are endowed by the members of the Tata family, which accounts for 66 per cent of the equity capital of Tata Sons. However, it is believed that Tata Sons was unhappy with Mistry’s approach of the shedding of the non-profit businesses, including the conglomerate’s steel business in Europe, and concentrating only on cash businesses. Well maybe the reason is not clear, but the impact on the group as well as the wider business world and the stocks of the various companies is likely to be volatile. Still, it has not been made clear whether Ratan Tata would be replaced after that or he himself will become one of the candidates in the fray.
Recent Appointments At Tata Sons Board
Talking about the fresh appointments, the appointment of two candidates as additional directors, has been stealing the thunder of sacking of Cyrus Mistry. The first one of them is Ralf Speth, CEO of Jaguar Land Rover, and the second candidate is the N Chandrasekaran, CEO & Managing Director of Tata Consultancy Services (TCS). They were appointed as Additional Directors on the Tata Sons Board on Tuesday. These fresh appointments came just a day after Cyrus Mistry was removed as the chairman of Tata Sons. Their appointment has been done in recognition of their exemplary leadership in their companies. Also, with their appointments, Tata Sons board has expanded to 12 members.
The abrupt and unprecedented ouster of Cyrus P Mistry as the chairman of Tata Sons has impacted the stocks of Tata Group companies. Some experts even say that, his removal will lead to an uncertainty and investors may look to exit, which will trigger a correction in Tata Group companies’ stocks.