Tata Sons board removes Cyrus Mistry from chairman's post
The board names Ratan Tata as interim chair of Tata Sons; new chairman in next four months
Cyrus Mistry, chairman of Tata Group, smiles during the Tata Consultancy Services Ltd. (TCS) annual general meeting in Mumbai June 27, 2014. PHOTO: REUTERS
MUMBAI:
India's Tata Sons dumped Cyrus Mistry as its chairman in a surprise announcement Monday, almost four years after his appointment as the first chief of the conglomerate from outside the Tata family.
The decision comes as the steel arm of the sprawling $100 billion conglomerate struggles to offload its loss-making British assets while its carmaking business continues to be plagued by weak sales.
"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 company said in a statement.
The conglomerate said Ratan Tata had been appointed interim chairman until a successor was appointed - a sensational comeback for the 78-year-old media-shy industrialist, who made way for Mistry in December 2012.
The search for a successor to Mistry, 48, was likely to take four months, the statement said.
Tata Sons is the holding company of the massive tea-to-steel Tata Group, arguably India's most famous family conglomerate, which spans at least 100 companies in as many countries.
Its businesses include one of India's largest IT firms, Tata Consultancy Services, the biggest vehicle maker Tata Motors, and a ritzy hotel chain which includes Mumbai's Taj Mahal palace hotel.
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Mistry succeeded Ratan Tata in December 2012 after being announced as its heir more than a year earlier. He is related to the famous Indian family through his sister's marriage.
Ratan Tata, who took over as chairman of Tata Sons in 1991 and led the company for 21 years, is credited with building it into a global behemoth.
During his time at the helm, the organisation went on a global purchasing spree, acquiring major names ranging from Tetley Tea to Land Rover and the Anglo-Dutch steel firm Corus in 2007 for $13.7 billion.
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However, Mistry's time in charge has been rocky and the group, founded under British colonial rule in 1868, has hit headwinds of late with lacklustre performances at several companies including Tata Motors, Tata Power and Tata Steel.
The group's revenue slipped 4.6 per cent for the financial year ended March to about $103 billion, hurt by global economic uncertainty, a crash in commodity prices and volatility in currencies, according to Bloomberg News.
It has been trying to offload its loss-making British steel assets for several months but has so far been able to find a buyer. More than 15,000 jobs at its plant in Port Talbot, Wales, are at stake.
Mistry said recently in an interview with the company's in-house magazine that the group "should not be afraid of taking tough decisions for the right reasons, with compassion".
In August Tata Motors reported a 57 percent fall in quarterly profits, slowed by weak sales of its luxury British unit Jaguar Land Rover and foreign exchange losses.
"Tata Motors is not on a sustainable footing and obviously Tata Steel has had its struggles.
"Mistry was not giving direction to the individual companies so Ratan Tata has probably just got frustrated and taken back the chairmanship," a companies analyst, who asked not to be named, told AFP.
The Mumbai-based Tata brands feature daily in the lives of Indians, with products ranging from salt to trucks to watches.
Mistry's sister is married to Tata's younger half-brother Noel, who was initially tipped to be the group successor and is now tipped by some analysts to get the top job.
India's Tata Sons dumped Cyrus Mistry as its chairman in a surprise announcement Monday, almost four years after his appointment as the first chief of the conglomerate from outside the Tata family.
The decision comes as the steel arm of the sprawling $100 billion conglomerate struggles to offload its loss-making British assets while its carmaking business continues to be plagued by weak sales.
"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 company said in a statement.
The conglomerate said Ratan Tata had been appointed interim chairman until a successor was appointed - a sensational comeback for the 78-year-old media-shy industrialist, who made way for Mistry in December 2012.
The search for a successor to Mistry, 48, was likely to take four months, the statement said.
Tata Sons is the holding company of the massive tea-to-steel Tata Group, arguably India's most famous family conglomerate, which spans at least 100 companies in as many countries.
Its businesses include one of India's largest IT firms, Tata Consultancy Services, the biggest vehicle maker Tata Motors, and a ritzy hotel chain which includes Mumbai's Taj Mahal palace hotel.
Everyone knows where intolerance in India is coming from: Ratan Tata
Mistry succeeded Ratan Tata in December 2012 after being announced as its heir more than a year earlier. He is related to the famous Indian family through his sister's marriage.
Ratan Tata, who took over as chairman of Tata Sons in 1991 and led the company for 21 years, is credited with building it into a global behemoth.
During his time at the helm, the organisation went on a global purchasing spree, acquiring major names ranging from Tetley Tea to Land Rover and the Anglo-Dutch steel firm Corus in 2007 for $13.7 billion.
India's Tata Steel confirms UK fraud probe
However, Mistry's time in charge has been rocky and the group, founded under British colonial rule in 1868, has hit headwinds of late with lacklustre performances at several companies including Tata Motors, Tata Power and Tata Steel.
The group's revenue slipped 4.6 per cent for the financial year ended March to about $103 billion, hurt by global economic uncertainty, a crash in commodity prices and volatility in currencies, according to Bloomberg News.
It has been trying to offload its loss-making British steel assets for several months but has so far been able to find a buyer. More than 15,000 jobs at its plant in Port Talbot, Wales, are at stake.
Mistry said recently in an interview with the company's in-house magazine that the group "should not be afraid of taking tough decisions for the right reasons, with compassion".
In August Tata Motors reported a 57 percent fall in quarterly profits, slowed by weak sales of its luxury British unit Jaguar Land Rover and foreign exchange losses.
"Tata Motors is not on a sustainable footing and obviously Tata Steel has had its struggles.
"Mistry was not giving direction to the individual companies so Ratan Tata has probably just got frustrated and taken back the chairmanship," a companies analyst, who asked not to be named, told AFP.
The Mumbai-based Tata brands feature daily in the lives of Indians, with products ranging from salt to trucks to watches.
Mistry's sister is married to Tata's younger half-brother Noel, who was initially tipped to be the group successor and is now tipped by some analysts to get the top job.