In a dramatic development that took the corporate industry by surprise, Tata Sons removed Cyrus Mistry as Chairman of Tata Sons after Monday’s board meeting.
Ratan Tata has been named as interim chairman and a selection committee has been set up to find a permanent replacement.
It is reported 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 on Monday 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 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.
The board named a five-member search committee, which includes Tata, to choose a successor to Mistry within four months.
Tata Sons made Cyrus chairman of the USD 100 billion salt-to-software conglomerate four years ago.
Chosen as Tata’s successor in November, 2011, Cyrus 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 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 will complete the selection process in four months.