Indian corporate giant Tata Group has unexpectedly removed its chairman Cyrus Mistry following a boardroom vote on Monday. Cyrus had served four years in the top job.
Tata Group – a $100 billion company with fingers in the retail, steel and coffee pies – said Mistry, aged 48, will be intermittently replaced by patriarch of the founding Tata family, Ratan Tata, aged 78.
Tata, who relinquished the post to Mistry in 2011, will serve as acting chairman until a more permanent successor is located, according to a statement from Tata Sons, the conglomerate’s holding company.
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The Tata statement said that the process would be completed within the next four months. Tata Group gave no explanation for the removal of Mistry, whose family controls 18 per cent of Tata Sons.
Sources close to the matter told the Financial Times that Tata had sensed an erosion of the firm’s ethical culture and long-term principles under Mistry, and that relations between the former chairman and the recently ousted had reached boiling point.
Adding to the division, Mistry had also created a five-person “group executive council” that was younger than the top team during Tata’s tenure. It was said to been by some in Mumbai’s business community as lacking the previous team’s expertise.
Mistry was Tata’s sixth chairman since its debut in 1868. He was the first not to be related by blood to its founder Jamshetji Tata.
In May, Tata Group launched an e-commerce venture Tata CLiQ under Mistry’s guidance. The move signalled Tata’s bid to cash in on rising purchasing power in the online market, which has always been dominated by large international retailers and startups backed by global tech investors.
Mistry’s departure is said to have caused shockwaves across the Indian business sector and broader global community.