Tata Group, one of India’s largest conglomerates, unexpectedly removed Cyrus Mistry as chairman Monday, replacing him temporarily with Ratan Tata. The board of the group’s holding company, Tata Sons Ltd., said the decision was taken “for the long-term interest” of the company.
Mistry, who became the chairman of Tata Group in late 2012 after Ratan Tata stepped down, was the first chairman to be appointed from outside the family in 70 years. He was only the sixth chairman of the group, which is nearly 150 years old. Mistry was appointed more than a year before Ratan Tata retired.
Local media reports said that boardroom and management issues may have been the reasons behind Mistry's ouster. Former Solicitor Gen. Mohan Parasaran told the Indian Express, a local newspaper, that the group had sought legal opinion a month ago on “issues relating to management ... He was replaced due to management issues.”
It was not immediately clear who would be the next chairman. The Tata Sons board has tasked a selection committee — that includes Ratan Tata, industrialist Venu Srinivasan, investment banker Amit Chandra, ex-diplomat Ronen Sen and economist Lord Kumar Bhattacharyya — to choose a new chairman.
Mistry is the youngest son of Pallonji Mistry, an Indian construction tycoon whose company holds around 18 percent stake in Tata Sons, making the Mistry family the largest individual shareholder and non-Tata shareholder. In 2011, Cyrus Mistry was part of the selection committee to find the successor but he was picked up as the successor by Ratan Tata. At the time, Noel Tata, Ratan Tata’s half-brother, was also a contender.