In a development that has taken many in India Inc. by surprise, Tata Sons said on Monday that chairman Cyrus Mistry has been replaced by doyen Ratan Tata as the interim head of the holding company. The sudden decision to remove 48-year-old Mistry was attributed to his approach to non-profitable businesses of the Tata Group, which grossed combined revenues of $103.51 billion in 2015-16.
Mistry was appointed the chairman of the company in December 2012.
The board also constituted a panel of reputed industrialists and professionals to choose a new chairman within four months.
"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," Tata Sons said in a statement.
A PTI report said that Mistry was probably removed as Tata Sons chairman because of his approach to the loss-making entities of the group and focus only on profitable ones.
Mistry has about 18.5 percent stake in Tata Sons, making him the single-largest shareholder in the holding company. He is the son of Pallonji Shapoorji Mistry.
The Group's market capitalisation as of October 6, 2016 was $125.4 billion. The Group employs about 6.60 lakh people and operates about 29 listed companies that include Tata Consultancy Services (TCS), Tata Chemicals, Tata Steel, Tata Motors, Tata Elxsi, Tata Global Beverages, Tata Coffee, Voltas, Jaguar Land Rover, Indian Hotels (Taj chain of Hotels), Rallis India, Tata Investment Corporation and Tata Power.
As expected, many people are tweeting on Cyrus Mistry's removal from Tata Sons and speculating the reasons therefor:
— CNBC-TV18 (@CNBCTV18Live) October 24, 2016
— Dinakaran Rengachary (@dinakaran) October 24, 2016
Cyrus Mistry's abrupt resignation as chairman of Tatasons suggests Ratan Tata may not be happy with his stewardship of the group.
— M K Venu (@mkvenu1) October 24, 2016