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Monday, October 24, 2016

Tata Sons chairman Cyrus Mistry out, Ratan Tata to hold fort until new successor

Nearly four years after taking over as head of the $103-billion automobiles-to-salt conglomerate, Cyrus Pallonji Mistry was “replaced” by the board of Tata Sons, the group’s holding company without any reasons being assigned. 

Mistry, chosen as Chairman of Tata Sons in November 2011, has been replaced by his predecessor Ratan Tata as interim Chairman. Tata who had retired in 2011 when he turned 75 will now be back at Bombay House, the headquarters of Tata group in Mumbai in the near term until a new chairman is appointed.

Tata Sons Board’s decision to replace Cyrus Mistry with Ratan Tata as the Tata group chairman has taken the corporate world by a storm. 

According to news channel, the decision to replace Cyrus Mistry was ‘performance-based’. The channel said that Tata Sons decided to remove Cyrus Mistry as the chairman in the “larger interest of the group”.

The Tata Sons board constituted a Selection Committee to choose a new Chairman for Tata Sons which holds significant stakes in Tata companies. The committee has Ratan Tata, industrialist Venu Srinivasan, investment banker Amit Chandra, ex-diplomat Ronen Sen and economist Lord Kumar Bhattacharyya.

 According to the report, Ratan Tata, will meet all Tata Group CEOs this week. A Town Hall is likely in the coming weeks to address the group. The Selection Committee will soon meet and fast track the appointment of the new chairman. The search of Tata Group’s new chairman will not be limited to within the group, the channel said. 

Various reports suggest that Tata Sons Board took the decision on “collective wisdom” to replace Cyrus Mistry. It appears that the principal shareholders felt it may be appropriate to change leadership. Some reports also suggest that a legal battle with the DoCoMo could be one of main reasons for ousting Cyrus Mistry. 

There is no change in CEOs at the operating level in the group. 
Cyrus Mistry resigns in one of the biggest upheaval in the corporate sector, the Tata Sons Board has appointed Ratan Tata as the interim chairman of the group, replacing Cyrus Mistry. 

The decision was taken at a Board meeting today. Mistry has resigned from his post as chairman. The Board has constituted a Selection Committee to choose a new Chairman. 

The Committee comprises Ratan N. 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. 

Mohandas Pai Cyrus Mistry had in December 2012 become the sixth chairman of the Tata Group, replacing Ratan Tata. Mistry had been the director of the company since 2006. Mistry was earlier managing director of the Shapoorji Pallonji Group.

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