As corporate surprises go, this one will rank right there on top. Tata Sons, the holding company of India’s largest business group, said on Monday it had decided to replace Cyrus Mistry as chairman.
Mistry is the son of Pallonji Mistry, who controls nearly 18% of the equity in Tata Sons directly and through trusts. That makes him the single largest individual shareholder.
“The board, in its wisdom and on the recommendation of the principal shareholders, decided that it will be in the long-term interest of the group to replace Cyrus Mistry,” the spokesperson for Tata Trusts told HT over the phone from Mumbai. He was on Monday told to act as the spokesperson for the Tata Group. Tata trusts, chaired by Ratan Tata, are the principal shareholders in Tata Sons.
A terse statement issued by the board did not give reasons, only that Ratan Tata, chairman before Mistry, will hold the position for four months, and a search panel will look for a replacement for Mistry.
Tata is on the search panel, too. Its other members are Venu Srinivasan, who heads Chennai-based TVS; Amit Chandra, a trustee of several Tata trusts; Ronen Sen, former Indian ambassador to the United States; and Lord Kumar Bhattacharyya, who founded the famed Warwick Manufacturing Group in the United Kingdom. There was no sign that such a move was brewing in this most conservative of business groups.
Mistry had taken charge in December 2012 amid much fanfare, the result of a long search by a panel headed by Ratan Tata, who ran the group for 21 years before making way for Mistry.