New Delhi: In a sudden and dramatic turn of events, Cyrus Mistry was on October 24 sacked as Chairman of India's largest conglomerate Tata Group and replaced by his predecessor Ratan Tata in the interim, a move that Mistry-camp slammed as unprecedented erosion of core values.
When Cyrus Mistry took over in 2012, he was faced with some challenging situations such as the decision to sell Tata Steel UK in the wake of mounting losses and the legal battle with Japan's DoCoMo over the split of their telecom joint venture Tata-DoCoMo.
And while there were no reasons given by the company for the change of leadership of the man who was brought in with much fanfare, 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.
Two days after being abruptly sacked as Tata Sons Chairman, Cyrus Mistry wrote an explosive letter to the board of members.
In the five-page letter, Mistry highlighted a lot of issues – from inheriting debt-ridden company to working interference et al. Mistry wrote a letter to the board members of Tata Sons levelling a series of allegations against Ratan Tata and contended that he was pushed in to a position of "lame duck" chairman and changes in decision making process created alternate power centres in Tata group.
Since then, there has been a continuing war of words between Mistry and the Tatas.
Markets regulator Sebi has been closely looking into the high profile Tata-Mistry case for any possible breach of corporate governance norms and listing regulations at various listed companies of the over $100 billion conglomerate.
Soon, Tata Sons, announced organisational changes and disbanded the Group Executive Council (GEC) set up by Mistry.
Even after being removed as chairman of Tata Sons -- the holding company of the Tata Group -- Mistry continues to head the group's several listed firms.
While the chairman can be removed by board of directors, removal of a director can only be done by shareholders. And so, Tata Sons, which brought back Ratan Tata after removing
Mistry last month, is seeking to remove him from group firms one after another.
However, a five-member search committee, which includes Tata, has been formed to choose a successor to Mistry within four months. 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.
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.
Noel Naval Tata, the half brother of Ratan Tata, Industry Tycoons like Indra Nooyi of Pepsi, Arun Sarin, former Vodafone CEO, N Chandrasekaran, TCS CEO, Ishaat Hussain and B. Muthuraman –both from Tata Group are among the top contenders for Tata group’s new chairman.