Tata Sons removes Cyrus Mistry as Chairman; Ratan Tata interim Chairman for 4 months

New Delhi: In a surprise move, Tata Sons today removed Cyrus Mistry as its Chairman, nearly four years after he took over the reins of the over USD 100 billion salt-to-software conglomerate. Ratan Tata, who Mistry had replaced on December 29, 2012, has been appointed as interim Chairman for four months during which a search committee will look for a replacement. CEOs at the operating company level have not been touched in the rejig. "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," read a statement on the Tata website. "The company's board and the principal shareholders in its collective wisdom took this decision, which they thought may be appropriate in the long term interest of Tata Sons and the Tata Group," the company spokesperson told IANS. "There is no change in the CEOs at the operating level," the spokesperson added. The board named a five-member search committee, which includes Tata, to choose a successor to Mistry within four months. Mistry 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 was made chairman on the basis of his representation from Shapoorji Palonji, the largest shareholder in Tata Sons. There were no reasons given for the change of leadership of the man who was brought in with much fanfare but it is believed that Tata Sons was unhappy with Mistry's approach of shedding non-profit businesses, including the conglomerate's steel business in Europe, and concentrating only on cash cows. In 2011, Mistry had become the sixth chairman of the Tata group. He was virtually unknown outside the tightly knit Parsi business community and belonged to the low-profile, media-shy Shapoorji Pallonji group. The younger son of Shapoorji Pallonji, the construction magnate who is the single largest shareholder of Tata Sons, Mistry is an engineer and a management graduate who is credited with increasing Pallonji’s construction business from a turnover of $20 million to $1.5 billion. It was only the second time in its 143-year-old history that the Tata group had a non-Tata as its chairman. Back in 1932, Sir Nowroji Saklatvala headed the group as its third chairman till his death in 1938. Sir Nowroji was succeeded by JRD Tata, who headed the group for 53 years before handing over the baton to Ratan Tata in 1991. However, Sir Nowroji was the nephew of Tata group chairman Jamsetji Nusserwanji Tata and could, therefore, claim to have family connections. JRD Tata was not a direct descendant of Jamsetji Nusserwanji Tata either. However, he was also related to the Tata group founder through his grandfather, Dadabhoy Tata. Mistry is not a Tata descendant though his sister is married to Noel Tata, Ratan Tata’s half-brother who was also in the race for the position but was passed over. (With additional information from The Telegraph, Calcutta)