In a dramatic development, Tata Sons, the holding company of the $103-billion (around Rs 6.88 lakh crore) Tata group, said its board of directors had removed Cyrus Pallonji Mistry, 48, as chairman of the conglomerate and named Ratan Tata, chairman of Tata Trusts, the largest shareholder in Tata Sons, as interim chairman for four months.
In a letter to group employees, Tata said the board has requested him to perform the role of chairman and he has agreed to do so “in the interest of stability of and reassurance to the Tata group”.
However, a brief statement by Tata Sons did not give any reasons for Mistry’s ouster, though sources close to the development said it was because of “performance” issues and has been brewing for some time. The turnover of India’s largest conglomerate dropped to $103 billion in 2015-2016 from $108 billion the previous year. Net debt rose to $24.5 billion (about Rs 1.63 lakh crore) in March 2016 from $23.4 billion a year ago. Sources close to the developments said Tata had expressed his displeasure to Mistry about the way the group was being run.
The board has constituted a committee to choose the new chairman. Apart from Ratan Tata himself, the committee comprises TVS Chairman Venu Srinivasan, Bain Capital’s Amit Chandra, former diplomat Ronen Sen and Kumar Bhattacharyya of Warwick University. All of them, except Bhattacharyya, are on the board of Tata Sons.
The committee has been mandated to complete the process in four months. “The selection of the new chairman will be from across the world and all suitable candidates will be considered,” said a top source in Tata Sons.