Four years after Cyrus Mistry's appointment as the chairman of Tata Sons, he was replaced on Monday by former chief Ratan Tata, who was made the interim chairman.
The decision was taken at the company's board meeting and a committee has been formed to select the next chairman within four months, a statement said.
"The committee comprises Ratan Tata, Venu Srinivasan, Amit Chandra, Ronen Sen and Lord Kumar Bhattacharyya, as per the criteria in the Articles of Association of Tata Sons. The committee has been mandated to complete the selection process in four months," the company statement said.
While the board did not specify any reasons for the sudden move, reports suggested that some of Mistry's decisions did not go down well with the board. The Economic Times reports: "There was a fundamental disconnect between Mistry and Tata, particularly with regard to ethos, values, vision and the direction that the group was headed in."
Cyrus Mistry is the son of Pallonji Mistry who headed the Shapoorji and Pallonji Group, a diversified conglomerate, according to Britannica. The Shapoorji Pallonji family is also one of the biggest shareholders in Tata Sons. The business conglomerate started with a construction company was founded by the family patriarch, Shapoorji Pallonji Mistry.
Here's a look at the Mistry family tree:
According to Business Standard, Pallonji Mistry (Cyrus' father) is known as the 'Phantom of Bombay House' for being a recluse. He was awarded the Padma Bhushan in January this year. The report added that he maintained a close association with the Tatas. Some of the Tata Group old-timers told Business Standard that in exchange for 12 percent stake in Tata Sons, Pallonji's father built steel and automobile factories for them and over time became they became the largest shareholders in Tata Sons. The Forbes magazine named him the fifth richest Indian in 2016 with a net worth of Rs $14.1 billion.
Also, Pallonji Mistry's daughter Aloo married Noel Tata, Ratan Tata's half-brother, the report added. Shapoor, Pallonji Mistry's eldest son, was made the chairman of Shapoorji Pallonji Group in June 2012.
The company started by Shapoorji Pallonji in 1865 was set up as Littlewoods Pallonji and Company, which eventually became the Shapoorji Pallonji and Company Ltd, according to Business Today. From construction, the group diversified into real estate, infrastructure, consumer products, textiles and biofuels, the report added.
The Shapoorji Pallonji family is likely to legally contest Cyrus Mistry's ouster with reports adding that the Tata family had sought legal advice before making the decision.
"Shapoorji Pallonji could challenge this decision, although I think all the rules were strictly followed and I was convinced," said Mohan Parasaran, a senior Supreme Court advocate who was consulted by the Tata family about a month ago, according to Reuters. However, Cyrus Mistry on Tuesday issued a statement saying that reports on litigation are just speculations, reported The Economic Times.
With inputs from agencies
Published Date: Oct 25, 2016 12:30 PM | Updated Date: Oct 25, 2016 14:36 PM