New Delhi: A day after the sudden removal of Cyrus Mistry as the chairman of Tata Sons, interim chief Ratan Tata took charge on Tuesday and asked CEOs of group firms to focus on their business and not be distracted by the change in top leadership.
The interim boss also asked all the CEOs to concentrate on enhancing returns to shareholders.
In one of the most shocking incidents that took the corporate world by surprise, Board of Tata Sons on Monday sacked Cyrus Mistry as the chairman of the group, just fours years after he took the reins from his predecessor Ratan Tata.
The move left many, especially in the corporate world, stunned, as no reason was given by the company for the abrupt removal of Mistry as the chairman of Tata Sons.
All the company said about the replacement of Mistry was that it was done keeping in mind the "long-term interest" of the company.
The board then appointed Emeritus Chairman, Ratan Tata as the interim head for a period of four months during which the five-member search panel is to find a replacement for Mistry.
Ratan Tata takes charge of Tata Sons
"We will evaluate and continue to undertake those (steps) that are required to. If there is any change, they will be discussed with you," Tata, 78, told the top executives of the USD 100 billion conglomerate.
Sources said he did not discuss the reasons that led to the sudden removal of Mistry.
Tata, who was at the helm of the group for 21 years before passing on the baton to Mistry in December 2012, said he has assumed the role of the interim chairman for stability and continuity so that there is no vacuum.
"This will be for a short time. A new permanent leadership will be in place," he added
"The companies must focus on their market position vis-a-vis competition, and not compare themselves to their own past. The drive must be on leadership rather than to follow," Tata told them, adding, "An institution must exceed the people who lead it."
Tatas appoint two new directors
The company also appointed Jaguar Land Rover CEO Ralf Speth and Tata Consultancy Services (TCS) CEO & MD N Chandrasekaran as additional directors into the board of holding company.
JLR and TCS are the most profitable of the 100 companies in Tata stable.
"This is in recognition of their exemplary leadership in their companies," Ratan Tata was quoted as saying in the statement.
Tatas file caveats against Cyrus Mistry
Meanwhile, in what could be foreseen as a boardroom battle at Tata group heading for a legal tussle, Tatas filed a caveat in the Supreme Court, Bombay High Court and the National Company Law Tribunal against Cyrus Mistry moving for relief against his ouster as chairman.
The move comes as bid on part of Tatas to prevent Mistry from getting any ex-parte relief from any legal forum.
Filing the caveat, Tata Sons and a Tata Trust, among others, said that they should be heard before grant of any relief to the ousted chairman.
Cyrus Mistry denies filing caveats in Company Law Tribunal against Tatas
On the other hand, Cyrus Mistry denied filing any caveats in any courts against the Tatas after his abrupt removal from top post.
Soon after his removal on Monday, there were reports that Cyrus Mistry could file a case in the Bombay HC and challenge the decision taken by Tata Sons' board to replace him with Ratan Tata.
However, Mistry denied such which was supported by his office.
A statement from Mistry's office said, "A caveat is a notice filed by a party fearing legal action seeking notice before action. Tatas have filed caveats seeking notice from Cyrus Mistry fearing legal action. Cyrus has not filed any caveats. He has already made a statement that such concerns are misplaced at this stage."
Shapoorji Pallonji, however, said it was studying the "circumstances" and had not yet decided on taking legal recourse.
"Neither the SP Group nor Mr Cyrus Mistry have made any statement yet. While the circumstances are being studied, there is no basis to media speculation about litigation at this stage. As and when a public statement becomes necessary, it would be made," the construction group said in a statement.
(With Agency inputs)