Mumbai: Tata Sons today announced that its Board has replaced Mr. Cyrus P. Mistry as Chairman of Tata Sons. The decision was taken at a Board meeting held here today.

The Board has named Mr. Ratan N. Tata as Interim Chairman of Tata Sons. The Board has constituted a Selection Committee to choose a new Chairman. The Committee comprises Mr. Ratan N. Tata, Mr. Venu Srinivasan, Mr. Amit Chandra, Mr. 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.

About the Tata group

Founded by Jamsetji Tata in 1868, the Tata group is a global enterprise, headquartered in India, comprising over 100 independent operating companies. The group operates in more than 100 countries across six continents, with a mission ‘To improve the quality of life of the communities we serve globally, through long-term stakeholder value creation based on Leadership with Trust’. Tata Sons is the principal investment holding company and promoter of Tata companies. Sixty-six percent of the equity share capital of Tata Sons is held by philanthropic trusts, which support education, health, livelihood generation and art and culture. In 2015-16, the revenue of Tata companies, taken together, was $103 billion. These companies collectively employ over 660,000 people. Each Tata company or enterprise operates independently under the guidance and supervision of its own board of directors and shareholders. There are 29 publicly-listed Tata enterprises with a combined market capitalisation of about $116 billion (as on March 31, 2016). Tata companies with significant scale include Tata Steel, Tata Motors, Tata Consultancy Services, Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and Indian Hotels.

(Official communication as conveyed to media by Tata Group spokesperson Debasis Roy)

News report

Cyrus Mistry ousted as Tata chief; Ratan Tata returns

Mumbai: In a sudden and dramatic turn of events, Cyrus Mistry was today sacked as Chairman of India’s largest conglomerate Tata Group and replaced by his predecessor Ratan Tata in the interim, triggering a possible confrontation between the single-largest shareholder and the company’s founding family.

Mistry’s family firm Shapoorji Pallonji Group, which has 18.4 per cent in Tata Sons — the holding company of USD 100- billion salt-to-software conglomerate — is believed to be considering fighting out the “illegal” removal.

In the suprise development, the board of Tata Sons, where 66 per cent shares are held by philanthropic trusts endowed by members of Tata family, ousted Chairman Mistry saying it was acting “for the long-term interest” of the firm.

No reason was given for removing Mistry who was brought in less than four years back with much fanfare, but it is believed there were differences over management style and his approach of selling assets after writing them down.

The board named a five-member search committee, which includes Tata, to choose a successor within four months.

“Tata Sons Board met today and decided to replace him as Chairman with immediate effect. The Tatas Sons board in its collective wisdom and on the recommendation of principal shareholder decided that it may be appropriate to consider a change for the long term interest of Tata Sons and the Tata group,” a Group spokesperson said.

Mistry, 48, who replaced Tata, 78, as chairman in December 2012, was only the sixth group Chairman in nearly 15 decades and the first from outside the Tata family. He will remain a director of the individual companies, though his tenure as Chairman is the shortest so far at the group.

Tata will be interim head of the group while a Selection Committee appointed by the company searches for a replacement.

The spokesperson said the Committee has been constituted with a mandate to complete the process in four months.

Also, there will be no change at the level of CEOs in the operating company, he said.

Mistry, who was chosen by a five-member panel in 2011 to succeed Ratan Tata, took over the reins of the conglomerate when the veteran industrialist retired on December 29, 2012 at the age of 75 years.

After taking charge, Mistry had to face some challenging situations such as the decision to sell Tata Steel UK in the wake of mounting losses.

Tata group is also engaged in a legal battle with Japan’s Docomo over the split of their erstwhile telecom joint venture Tata Docomo.

In an interview with an in-house magazine, Mistry had last month stated that the group “should not be afraid of taking tough decisions for the right reasons, with compassion” amid “challenging situations” confronted by some of the group’s businesses that would require hard and bolder decisions on pruning portfolio.

This was in contrast to steps taken by Ratan Tata, who led the group into some notable acquisitions, starting from Tetley by Tata Tea for USD 450 million in 2000, to steelmaker Corus by Tata Steel in 2007 and the landmark Jaguar Land Rover in 2008 for USD 2.3 billion by Tata Motors.

During Tata’s tenure, the group’s revenues grew manifold, totalling USD 100.09 billion (around Rs 475,721 crore) in 2011-12 from a turnover of a mere Rs 10,000 crore in 1991.

Born on July 4, 1968, Mistry completed his graduation in civil engineering from London’s Imperial College of Science, Technology and Medicine and followed it up with a masters in Management from the London Business School.

“Tata Sons today announced its board has replaced Mr Cyrus P Mistry as Chairman of Tata Sons. The decision was taken at a board meeting held here today,” a Tata Sons statement said.

The board constituted a selection committee comprising Tata, TVS Group head Venu Srinivasan, Amit Chandra of Bain Capital, former diplomat Ronen Sen and Lord Kumar Bhattacharya. All of them, except Bhattacharya, are on the board of Tata Sons.

“The committee has been mandated to complete the selection process in four months,” it added.

Under Ratan Tata’s chairmanship spanning over two decades (1991 to 2012), the Group’s revenue grew from around USD 6 billion to USD 100 billion, driven by his expansionist strategy that included overseas purchases like tea maker Tetley in 2000 and luxury car company Jaguar Land Rover (JLR) in 2008.

But out of 100 companies under Tata Sons, only a few were profitable, with Tata Consultancy Services (TCS) and JLR clearly standing out.

Tata Steel, which bought Corus Group Plc in 2007, has been cutting operations in the UK since the 2008 global financial crisis.

Mistry, on the other hand, was looking at tackling mounting debt by raising cash, refinancing loans and selling assets after writing them down.

He was chosen as Tata’s successor in November 2011, and was appointed Deputy Chairman of Tata Sons, whose board he had entered in 2006. He became chairman in December 2012 on the basis of his representation from Shapoorji Palonji, the largest shareholder in Tata Sons.

An engineer from the Imperial College of Science, Technology and Medicine in London, he began working for the group controlled by his father, billionaire Shapoorji Pallonji Mistry, in 1991.

Founded in 1868, Tata Group employs nearly 700,000 people and its 100 business include making salt, steel, leather goods, watches, tea, trucks and buses and luxury cars, developing software, generating electricity, running shopping chains, operating undersea cables and mobile telephony and owning hotels. Recent additions include defence, infrastructure and financial services. PTI

Tata Sons disbands Group Executive Council set up by Mistry

Mumbai:On a day Cyrus Mistry was ousted as the Chairman of Tata Sons, the Group Executive Council (GEC) set up by him has been disbanded.

The GEC, headed by Mistry, was set up in April 2013 with the objective providing strategic and operational support to him. It included N S Rajan from Ernst & Young, Tata brand custodian Mukund Rajan, ex-BSE chief Madhu Kannan, strategist Nirmalya Kumar and Tata veteran Harish Bhat.

Mukund Rajan and Harish Bhat will be offered new roles within the group, sources in the know of the development said.

However, it is unclear what fate awaits for the rest of the members in the group.

Soon after making public the departure of Mistry, Tata Group’s website removed all the details related to the GEC, including profile of the members.

“The page you are looking for has been moved or removed,” said a message on the web page of GEC on Tata group’s official website.

Comments could not be obtained from Tata Sons on the same.

The GEC had replaced the roles earlier which were performed by the group corporate centre (GCC) and the group executive office (GEO) before Mistry took over as Chairman.

Meanwhile in a letter to Prime Minister Narendra Modi, Ratan Tata informed that the Board of Directors of Tata Sons has in its meeting today decided to replace Cyrus P Mistry as Chairman with immediate effect.

“A new management structure is being put in place and a selection committee has been constituted to identify the next chairman,” he said in the letter.

Subsequent to the day’s development, Tata group’s listed firm Tata Motors and Tata Power informed the bourses about Mistry’s departure.

“Ratan N Tata shall be the Interim Chairman of Tata Sons Limited until the new Chairman is appointed in accordance with the procedure prescribed in the Companies Act, 2013 and the Articles of Association of Tata Sons Ltd,” Tata Motors informed the BSE.

“This being a material development, the necessary disclosure is being made to the stock exchange,” Tata Power said while informing the bourses.

Tata group has several listed entities, including Tata Chemicals, Indian Hotels Co Ltd, Tata Coffee, Tata Elxsi, TCS, Tata Global Beverages, Tata Investment Corporation, Tata Sponge Iron, Tata Steel and Tata Teleservices.

The Tata group comprises over a 100 operating companies spread across six continents.

In 2015-16, the revenue of Tata companies, taken together, was USD 103 billion and collectively employed over 6,60,000 people.

Mistry’s Tata journey: Suprise entry, abrupt exit

Mumbai: Cyrus Mistry, who was part of the panel tasked to find a successor to Ratan Tata for heading the over USD 100 billion Tata Group, had himself become a surprise selection only to see his tenure cut short abruptly today within four years — the shortest at the conglomerate.

The 78-year-old Tata is now part of the selection panel that has been asked to search the next Chairman of Tata Sons Ltd, the group’s main holding company, within next four months and he would also serve as interim chairman in this period.

A low-profile man to the extent of being reclusive, Mistry, now 48, was a surprise choice to succeed Tata, who retired on December 29, 2012 as Chairman of the one of country’s oldest business empires.

The only second non-Tata to take charge of the group after Nowroji Saklatvala in 1932, Mistry by virtue of his age came in with a lot of promise, specially of continuity when he became Chairman of Tata Sons — the promoter of the major operating Tata companies at the age of 44.

However, in nearly four years since he took over the reins of the salt-to-software conglomerate, Mistry had to face many challenges in both domestic and global markets as many of the group companies faced headwinds.

He undertook a strategy of divesting assets in contrast to what his successor did.

Significant among them is the group’s steel business, specially Tata Steel Europe. Earlier this year, the company had completed selling of the European long products business that three units the UK as well as a mill in France to Greybull Capital.

It had also announced plans to sell its UK operations after years of losses, although the company is yet to finalise the sale. .

In July, Tata group’s hospitality firm Indian Hotels Company Ltd (IHCL), which runs Taj Group of hotels, completed sale of Taj Boston hotel for USD 125 million (about Rs 839 crore).

The hospitality firm had also sold off 12.7 lakh shares of Belmond (earlier known as Orient Express, which the Tata Group tried unsuccessfully to acquire in Ratan Tata’s time) for a consideration of USD 11.96 million. IHCL had also sold BLUE Sydney, a Taj Hotel, to Australia Hotels & Properties Ltd for AUD 32 million (nearly Rs 179 crore) in 2014.

The Tata group is also engaged in a legal battle with Japan’s Docomo over the split of their telecom joint venture Tata Docomo.

Contrary to these developments, Tata led the group into some notable acquisitions, starting from Tetley by Tata Tea for USD 450 million in 2000 to steelmaker Corus by Tata Steel in 2007 and the landmark Jaguar Land Rover in 2008 for USD 2.3 billion by Tata Motors.

While the reasons for Mistry’s sacking by the Tata Sons board is not clear, according to sources, the decision taken on the suggestion of Tata Trusts.

“In the long term interest of Tata Sons and the Tata Group, the principal shareholders — Tata Trusts suggested to the Board of Tata Sons that it would be appropriate to look for a change and look forward,” a source said.

When Mistry took over, the Tata Group had a revenue of USD 100.09 billion in 2011-12. Since then, the group’s revenue grew to USD 103 billion in 2015-16.

About 66 per cent of the equity capital of Tata Sons is held by philanthropic trusts endowed by members of the Tata family. The largest of these trusts are the Sir Dorabji Tata Trust and the Sir Ratan Tata Trust, which were created by the families of the sons of Jamsetji Tata, the Founder.

Mistry belongs to Shapoorji Pallonji, which is the single largest shareholder in Tata Sons with 18.4 per cent stake. PTI